What are liquidations?

Liquidations in Agilely ensure that the entire Position supply remains fully backed by collateral. If a Position exceeds the maximum Loan-to-Value (LTV) defined on the platform, it will be subject to liquidation.
During the liquidation process, the debt of the Position is canceled and absorbed by the Stability Pool, while the collateral is distributed among Stability Providers. Importantly, the owner of the Position retains the full amount of USDA borrowed and is not required to repay their debt.
System Status significantly influences how Liquidations operate. It is crucial to have a clear understanding of Recovery Mode to avoid unexpected liquidation events.

Who can liquidate Positions?

Any user can initiate the liquidation of a Position once it surpasses the maximum LTV threshold. As an incentive for this service, the initiator receives 30 USDA as gas compensation, along with 0.5% of the Position's collateral.