Loan Liquidation price

is it possible to add the price at which your collateral will get liquidated to the UI?

8 Likes

That would be really helpful

2 Likes

That would depend on the bids wouldn’t it? It’s not known beforehand afaik although the ceiling would be the prevailing market price of LUNA.

1 Like

Well, Anchor-team could mention, that that price would only (!) be a very roough (!!) indication - so anyone coud have a quickNdirty Idea about how to deal with that potential risk-mark.
An asterisk would clearly help to save the Newcomers.

3 Likes

I think this will be super useful to prevent something like this happening.

MakerDAO and AAVE both have some warning indicators that tell you when the loan amount is close to liquidation and also the liquidation price. The liquidation price would be “the price at which your liquidation can be triggered” (i.e. loan amount * 2 / number of bluna posted). The actual fill price would depend on the bids. And also, I think it should be noted that the liquidation price goes up as the loan accrues interest.

4 Likes

This is a good idea and I want something like this.

One thing I’d like to point out is that this may be easy to calculate when there is only type of provided collateral such as bLUNA. But, how could this be displayed if the provided collateral contains mutliple bAssets? E.g., a borrower could have Provided bLUNA go down but also have Provided bDOT go up; so, there wouldn’t be an exact dollar amount for any single bAsset.

One possible solution is to calculate the tolerance of collateral value loss before liquidation and show some kind of figure to convey that your collateral can tolerate a, e.g., 10% decrease in value before your loan becomes under-collateralized. With that, it could simply show: bAsset prices minus 10% for each provided bAsset to serve as a guide. This figure would be precise when only one type of bAsset is provided as collateral, but would only be serve as a guide when multiple bAssets are provided.

While we’re at it, I would also like to request a figure for ‘collateral value loss tolerance’ in percent. A figure like this should be much easier to calculate, regardless of the number of bAssets provided.

Indicators like this would provide more transparency for borrowers by helping them better understand their liquidation risk, and therefore encourage more borrowing and generate more interest revenue.

Thank you.

1 Like

Yes, absolutely agreed! Too many people got liquidated another night and many of them probably didn’t have a clear understanding of when they will be liquidated.
I think adding the approx price of liquidation + a huge red warning when it is coming close to liquidation would be a good (but small) first step short-term.
But mid-term we would need to implement proper automated collateral management - as was suggested here: https://forum.anchorprotocol.com/t/automatic-collateral-management.

I would definitely vote to fund both these options from the Anchor community pool and I’m sure most of us would do this too. It is a very needed feature for Anchor borrowers - especially as we will see many newcomers to Terra.