If the 24-hour grace window expires without sufficient action, we liquidate to bring the position back within policy or to close it entirely.
Step-by-Step
Final Snapshot
Timestamped view of obligations.
Collateral value (haircut).
Live caps.
Plan the Unwind
Size a TWAP program.
Keep market impact ≤ system cap.
Execution
Hedged Loans (USDT/USDC/BTC):
Unwind hedges in sync.
Sell enough 0FX collateral to settle obligations in the borrowed asset.
Apply Fees & Costs
Liquidation Fee: Designed to cover modeled impact.
Execution Costs: Gas, swaps, hedge close.
Waterfall (Proceeds Allocation)
Execution & operational costs
Net funding (if any) and accrued base APR
Principal
Residual value (surplus collateral) → returned to your receiving wallet
Proof & Notifications
You receive transaction hashes for collateral sales, hedge closes, and repayments. A closeout statement shows the waterfall and any residual returned.
If Liquidity is Thin
Extend the TWAP schedule or partial-liquidate to the nearest safe LTV, then reassess.
If oracle divergence or venue constraints persist, liquidation may proceed in phases until back inside policy.
What You Can Expect
A process aimed at minimizing market impact, keeping the system inside its cumulative impact cap, and returning any excess value to you after obligations and fees.
