🤖Liquidation

When a user's Maintenance Health < 0, liquidation occurs. BullNow's liquidation mechanism allows for gradual liquidation by liquidators, which continues until the liquidated account's Initial Health > 0. The benefits of this design compared to similar products' liquidation processes are:

1. Avoidance of all assets being liquidated at once during volatility.

2. Provides users with ample buffer room.

Liquidation Process

The liquidation process is as follows:

1. Maintenance Health < 0

2. Cancel Orders:

   • If it brings Initial Health back above 0, the process ceases.

3. Liquidate Assets / Perps

   • If it brings Initial Health back above 0, the process ceases.

4. Liquidate Borrows

   • If it brings Initial Health back above 0, the process ceases.

It is worth noting that at any point during this process, if the Initial Health becomes greater than 0, the liquidation process will be halted.

Liquidation Price

Any user has the opportunity to buy assets from the liquidating account at a discounted price or settle its debts at a premium.The net price is calculated as follows:

• Long: oracle_price * (maintenance_asset_weight +4 ) / 5

• Short: oracle_price * (maintenance_liability_weight +4 ) / 5

During liquidation, BullNow will receive 25% of the profit of liquidation, and the fees are deposited into protocol's insurance funds to enhance protocol's resilience and stability against risks.so, the profit of liquidation is:

• Long: oracle_price * (( 1 - maintenance_asset_weight) / 5 ) * 0.75

• Short: oracle_price * (( maintenance_liability_weight - 1 ) / 5 ) * 0.75