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Liquidating collateral below a certain margin, automatically and on chain
by Cantinflas 4y ago
Liquidating collateral below a certain margin, automatically and on chain
- blitzar 4y agoWhich does what to the value of the assets in the collatteral pool ... which then in turn triggers selling of assets in the collateral pool ... which then does what to the value of assets in the collateral pool ...
- chrisco255 4y agoEach collateralized debt position is independent. They do not use one large pool of collateral for all DAI. Each CDP is independently liquidated as the value of the collateral drops. Can liquidations trigger price drops in ETH? Yes, and that can cause a cascade of liquidations as the collateral value falls on various CDPs. But that just wipes more debt as it cascades. MakerDAO has responsible thresholds (150%) for liquidations. It's not without risks but it's one of the good eggs.
- Tostino 4y agoI wish there was a visualization of the likely outcomes with the rules they have in place, and a few variations with different assumptions.
- chrisco255 4y agohttps://maker.blockanalitica.com/vaults-at-risk-simulation/ https://maker.blockanalitica.com/vaults-at-risk-simulation/ This is a nice table for that.
- rglullis 4y agoThere is a bit more to it, and this is the part that is covered by the MKR token: https://docs.makerdao.com/keepers/the-auctions-of-the-maker-protocol https://docs.makerdao.com/keepers/the-auctions-of-the-maker-...
- deleted 4y ago[deleted]