Liquidation Engine
DeFi · Abyss
The mechanism in lending and perpetual futures protocols that closes undercollateralized positions to protect the system from bad debt. When a borrower's collateral ratio falls below the maintenance margin, liquidator bots repay part of the debt and receive a discount on the seized collateral as incentive. On Solana, protocols like Drift, MarginFi, and Kamino use cranked or keeper-based liquidation engines that execute within the same slot for near-instant settlement.