CR). Together with the collateral factor (
CF), they are used to compute the health factor of an open vault. For example, for a vault with 160€ worth of collateral and 100 agEUR borrowed, if the collateral factor is 2/3:
xas the amount of stablecoin debt to repay
cas the collateral's value in stablecoin
das the amount of stablecoin debt of the vault
eas the liquidation discount
sas the liquidation surcharge
x: the health factor can't be put back at a healthy value. In this case, liquidators are able to liquidate all of a position’s collateral to avoid leaving an amount of debt that is too small to repay. In such situation, it is possible that some of the debt is left unpaid. This will be pooled across contracts and accounted for as bad debt, to make sure no surplus is distributed until this debt is erased.
aas the liquidation boost, a factor determining the slope of the function.
fis a piecewise linear increasing function of the veANGLE balance, capped by a certain amount.
xto be repaid by the liquidator is determined by the Target Health Factor parameter such that:
CF= 2/3, as the collateral factor
c= 120, as the collateral value expressed in stablecoin
d= 90, as the debt value or stablecoins borrowed
s= 2%, as the liquidation surcharge
e= 10%, as the liquidation discount
x, as the amount of stablecoins repaid by the liquidator
HF < 1, the vault should get liquidated. After being liquidated, the new Health Factor of the vault should be:
x = 67after solving the equation