Can you give me an example ?
as of 06/02/2022
The amount of a position that can be liquidated at one time is set at 50% in the Hatom Protocol (the Close Factor), which means that only a fragment of the borrower’s debt is repaid and not all of it.
For example, a position where you have supplied $2,000 USDC and took a loan of $800 in EGLD is eligible for liquidation. Suppose the Liquidation Incentive for USDC is 10%.
A Liquidator will come and pay on your behalf up to $400 in EGLD (50% of what you borrowed). In return, the liquidator will get $440 of your USDC: $400 USDC + $40 USDC for the Liquidation Penalty.
Your new position after the liquidation: Supplied Value - $1,560 in USDC, Borrowed Value - $400 EGLD.