💸Liquidations
Hashstack uses a dual-liquidation methodology to ensure loans get liquidated in time, removing bad debt from the protocol. Dual-liquidation involves community-backed liquidations along with protocol-backed liquidations. When a loan becomes liquidable, we allow the community to liquidate. However, if the health factor drops further, protocol-managed liquidation bots come into action to remove loans before they create losses.
The health factor is used to determine when a loan can be liquidated and who can liquidate loans at which state. (More about health factor here).
Hf > 109% - Healthy loan
109% ≥ Hf > 106% - Liquidation call
Hf ≤ 106% - Liquidable by anyone
Hf ≤ 104.5% - Liquidable by protocol
Hashstack currently uses pragmaoracle.com (formerly Empiric) as its trusted oracle. The oracle is used at various points in the contracts:
Determining the amount of leverage allowed based on the collateral and requested loan USDT value.
Computing if a loan is liquidable.
Allowing slippage in L3 integrations (Todo).
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