Protocol

Collateral and liquidation

Loans open at 250% collateral and must stay above 200%. Below that, anyone can close the loan by buying its collateral at a 5% discount.

Collateral#

Asset	Held as	Valued at
SOL	Wrapped SOL, legacy SPL token	Pyth SOL/USD minus its confidence interval
jitoSOL	JitoSOL, legacy SPL token	Jito stake pool SOL per jitoSOL × the SOL value above, less 10%

Debt is valued with Pyth USDC/USD plus its confidence interval, so USDC is never assumed to be worth exactly one dollar. Details on Prices and oracles.

The ratio#

Text

ratio = collateral value ÷ debt

Debt always includes the full term's interest. The program checks the ratio at four moments:

Moment	Requirement
Commit	250% of the maximum amount plus interest at 15.75%
Take the loan	250% of the actual debt at the clearing rate
During the term	At or above 200%, or the loan can be liquidated
After maturity	Any unpaid loan can be liquidated

Liquidation#

Liquidation closes the whole loan in one instruction. The liquidator pays USDC into the auction's pool and receives collateral at a 5% discount to its conservative value:

Collateral covers the debt. The liquidator pays the entire debt and receives collateral worth the debt divided by 0.95. The rest of the collateral returns to the borrower in the same instruction.
Collateral doesn't cover the debt. The liquidator pays the discounted value of all the collateral and receives all of it. The unpaid debt is written off against that auction's notes.

The liquidator sets the most it will pay and the least collateral it will accept; the instruction fails if prices moved past either bound.

Example#

A borrower takes 10,000 USDC at 6.25%, a debt of 10,047.945206 USDC, against 130 SOL with SOL at $200, a ratio of 259%. SOL falls to $150:

After the drop	Amount
Collateral value	19,500 USDC
Ratio	194%, below 200%
Discounted value	18,525 USDC
Liquidator pays	10,047.945206 USDC
Liquidator receives	70.51 SOL
Returned to the borrower	59.49 SOL

The example ignores confidence intervals, which make the program's values slightly more conservative.

Who liquidates#

Anyone holding USDC. The Market page has a liquidation desk that lists every eligible loan with a live quote and sends the instruction from your wallet. The keeper never liquidates and never spends funds on anyone's behalf.