Somethings wrong here guys. There no way the liquidation is 50 percent.
Guys I have a dilemma. Yesterday I bonded 10k b Luna. And I borrowed 50 percent.
I took the borrowed 5k and put it in the gold iau pool in mirror portocol. Now today my b Luna is cut in half. Hopefully someone has an answer.
I thought you get liqudiated when drops in half?
Dude - I’m sorry to hear that. I’m not part of the Anchor team, but here is how I understand the collateral works.
If you post $10k of bluna, the maximum you can borrow is $5k, but that means any kind of dip in bluna means you will get liquidated. You need to keep a minimum of 2x your loan value as collateral.
If you posted $20k bluna and borrowed $5k, that means you will get liquidated when your collateral is worth $10k, i.e. if luna drops 50%. MakerDAO has a similar overcollateralization requirement where you can only borrow up to 66% of the value of the collateral.
The safety margin is there because crypto can be very illiquid and volatile and the protocol needs to protect the depositors from losing money. If they started liquidation only once the collateral value equals the loan, then the depositors are almost guaranteed to lose money.
Thnks a lot. Yah makes sense now. I thought it was if the price drops 50 percent. Appreciate the help.
Hello! I am new to Anchor and Mirror and I don’t fully understand what liquidation means. Did you lose your bLuna after it repaid your loan? Or it just gets cashed out of the investment and the excess returned to you? Thanks!
Read about margin trading. Liquidation is a financial term, not crypto.
I wonder why you get half of bLUNA, if it is liquidated, shouldn’t be bLUNA be 0? If your position is safe, bLUNA should be not less, right?
I wonder why there is still half amount of bLUNA remaining?
Unlike other money market protocols, Anchor liquidates collaterals in portions.
Wow, this is advantage of ANC, awesome, so ANC is more safer than other lending procotols. Thanks for your point.