Pending Liquidation
If a borrower's health factor goes below 1 or is in overdue condition, borrower's deposited NFT is in the status of pending liquidation, see more in Risk Models: Health factor or Time-based. There will be two possibilities:
A: The first person makes a bid, the liquidation is triggered successfully and the deposited NFT enters the auction process, see more in Liquidations: Auction Design. If no one follows the auction later, the first person will be the winning bidder.
B: No one makes the bid. Liquidation process won't be triggered, the deposited NFT will stay in the pools and become Bad Debt, see more in the Bad Debt.
Last modified 8mo ago