🌊 Liquidation

In the event that your debt ratio has gone above the threshold (Liquidation Threshold), your position will be liquidated.

The value you receive back after liquidation will depend on the Liquidation Threshold. Please refers to the table below for an estimate.

PancakeSwap Pools

Pools

Liquidation Threshold

Liquidation Bounty

Estimated returned value to farmer (% of position value at liquidation)

ALPACA-BUSD

83.3%

5%

11.6%

BUSD-ALAPCA

70%

5%

25%

ITAM - BNB

70%

5%

25%

bMXX-BNB

70%

5%

25%

BELT-BNB

70%

5%

25%

BRY-BNB

70%

5%

25%

pCWS-BNB

70%

5%

25%

SWINGBY-BNB

70%

5%

25%

CAKE

80%

5%

15%

DODO-BNB

80%

5%

15%

CAKE-BNB

80%

5%

15%

BTCB-BNB

83.3%

5%

11.6%

BTCB-BUSD

83.3%

5%

11.6%

CAKE-BUSD

83.3%

5%

11.6%

ETH-BNB

83.3%

5%

11.6%

BNB-BUSD

83.3%

5%

11.6%

BNB-USDT

83.3%

5%

11.6%

DOT-BNB

83.3%

5%

11.6%

UNI-BNB

83.3%

5%

11.6%

LINK-BNB

83.3%

5%

11.6%

XVS-BNB

83.3%

5%

11.6%

COMP-ETH

83.3%

5%

11.6%

SUSHI-ETH

83.3%

5%

11.6%

VAI-BUSD

90%

5%

5%

USDC-BUSD

90%

5%

5%

DAI-BUSD

90%

5%

5%

UST-BUSD

90%

5%

5%

USDT-BUSD

92%

5%

3%

WaultSwap Pools

Pools

Liquidation Threshold

Liquidation Bounty

Estimated returned value to farmer (% of position value at liquidation)

ALPACA-USDT

80%

5%

15%

USDT-ALPACA

70%

5%

25%

ALPACA-BNB

80%

5%

15%

BNB-ALPACA

70%

5%

25%

WAULTx-BNB

70%

5%

25%

WEX-BNB

80%

5%

15%

WEX-USDT

80%

5%

15%

BTCB-BUSD

83.33%

5%

11.6%

ETH-BUSD

83.33%

5%

11.6%

BTCB-USDT

83.33%

5%

11.6%

ETH-USDT

83.33%

5%

11.6%

BTCB-ETH

83.33%

5%

11.6%

BNB-BUSD

83.33%

5%

11.6%

BETH-ETH

90%

5%

5%

USDT-BUSD

90%

5%

5%

Example:

Alice opened a 2x leveraged yield farming position on CAKE-BNB pool

  • She supplied 10 BNB

  • our Vault loaned her 10 BNB

  • We then optimally swapped BNB into CAKE and acquired LP tokens for her

At this time, Alice's position is ~20 BNB ( in reality, it will be slightly lower due to price impact from swapping and trading fees)

  • Her debt ratio is ~50%

Sometime later , BNB price has appreciated significantly causing Alice's position to be worth less in BNB term. This is because the LP pool will try to maintain equal value of the token pairs, causing Alice to have more CAKE and less BNB in her position.

Unfortunately, BNB price continued to appreciate such that the debt ratio has reached 80% (Liquidation Threshold), and the liquidation bot called the smart contract to close her position

  • At this time, her position value is roughly ~12.5 BNB

  • 10 BNB will be used to repay the loan

  • 0.625 BNB (5% of the position value at liquidation ~12.5 BNB) will be paid to the liquidator as a bounty

  • 1.875 BNB will be returned to the user

To make this example easy to understand, please note that this example ignores the impact of yield farming rewards and trading fees which would increase Alice's position value and make her position safer. It also ignores the borrowing interest rate which would increase the debt value, moving her debt ratio higher.