Liquidation

Borrowers are subject to liquidation if their account liquidity drops below zero. Account liquidity is the sum of a user's supply balances multiplied by those markets' collateral factors, minus their borrow balances. On Vivacity Finance, the process of liquidation is nearly identical to that of Compound V2.

Whitelisting Requirement (for RWAs)

Liquidators who wish to liquidate RWA collateral must themselves be whitelisted with the relevant RWA issuers.

If an account collateralized by multiple different RWAs is subject to liquidation, liquidation takes place in separate transactions, whereby each collateral asset is seized individually and its corresponding borrow repayed. In this case, liquidators can choose which "parts" of an account to liquidate, and must do so if they are not whitelisted for all collateral assets.

Liquidation Transaction

To liquidate an account, a liquidator calls the liquidateBorrow function on the cToken or cRWAToken of the collateralized asset. Additional information about performing liquidations can be found in the Compound V2 docs.