Liquidation

To maintain the health of the Polter Finance protocol, accounts with a “Health Factor” falling below 1 will face liquidation.

During liquidation, the liquidator will decide which of the borrowed assets will be topped up, and how much of the borrower’s collateral will be claimed in return.

In addition to the claimed collateral assets, the liquidator will receive additional value in the form of the borrowed asset's penalty.

A borrower’s Health Factor is derived from the combination of their total LTV and the Liquidation Threshold of each asset.