🤖Liquidation Bots (Beta)

Disclaimer: This tutorial is for educational purposes only. Liquidations involve financial risk. All participants should ensure compliance with applicable laws and regulations in their jurisdiction before performing any liquidation activities.

In the Bonzo Protocol, liquidation occurs when a borrower's collateral value falls below a certain threshold due to changes in asset prices or accrued interest. Liquidators can repay a portion of the borrower's debt and receive a liquidation bonus on the collateral they obtain. This process helps maintain the protocol's solvency and incentivizes liquidators.

This tutorial will demonstrate how to perform a liquidation on the Bonzo Protocol deployed on the Hedera blockchain using a custom smart contract and a Hardhat script.

Core Concepts:

  • Collateral Asset: The asset supplied by the borrower.

  • Debt Asset: The asset borrowed by the borrower.

  • Health Factor: A value representing the safety of the borrower's position. A health factor below 1 indicates that the position is undercollateralized and can be liquidated.

Example Code & Script Repositories:

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