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Information about Liquidations of Vaults on xBacked
The xBacked protocol allows users to stake xUSD into a pool used by the system for liquidating risky vaults.
As soon as a vault collateral ratio drops below
110%liquidion can begin. In this scenario, xUSD is used to repay the vault debt. The collateral is then transferred to the liquidator.
This happens until a vault collateral ratio is back to
Liquidators receive discounted collateral. At the moment, this discount is 3.5% to the spot rate.
The protocol takes a 1% fee from the liquidated collateral. This leave the liquidator with a 2.5% discount to spot
Partially liquidated. Vaults are only liquidated back to a healthy collateral ratio of