For liquidators

A short orientation for users thinking about running a liquidation bot. The deeper how-to lives in For keepers; this page is the conceptual primer.

What you need

• A position on the protocol with healthy collateral headroom — enough that you can absorb the debt of a liquidation without dropping your own H below 100%.
• An off-chain monitoring system watching positions for H < 100%.
• An on-chain account holding POOL_SQUARE_ROLE (for direct square calls) or the ability to mine the PoW puzzle (for the public liquidate path).

You do not need:

• Liquid stablecoins or any specific asset to repay debt.
• A flash-loan integration.
• Pre-deposited capital in a stability pool.

The economics

At the H = 100% boundary, you take on debt of value $D$ and receive collateral of value $D\times (255/170)=D\times 1.5$ — the implicit 50% bonus, captured in collateral. Strictly underwater (H < 100%), the realised bonus is smaller: uniform slicing seizes collateral in proportion to the victim's live C/D ratio, which is below 1/α once H drops below 100%. The "boundary 50%" is the upper bound; the closer to bad-debt territory you let the victim drift, the less you make on the call.

The catches:

• Your post-liquidation H must remain ≥ 1. This caps how much debt you can absorb in any single liquidation.
• If the absorbed position is locked, you can't immediately redeem the collateral. You'll need to wait or sell at a discount.
• Gas costs. A simple liquidation is ~300k gas; a worst-case (16-slot lock) liquidation is ~6.7M gas.
• No protocol-stored slice default. You pass partial_exp on every call. Because partial liquidation preserves the victim's H, the position remains liquidatable after each slice — you can size the bite to your headroom rather than feeling forced into one big call.

In practice, most keepers run a position roughly 2–3× the size of the average liquidation they expect to capture, with conservative H targeting (≥ 2.0) so they're not themselves liquidatable.

Two paths

square() is role-restricted (POOL_SQUARE_ROLE) and free of PoW. liquidate() is public but pays a per-partial_exp PoW cost from the POW_SQUARE parameter — and only works when the pool address itself holds POOL_SQUARE_ROLE, since the public path ultimately runs this.square(...) and the role check applies to the pool, not to the external caller. Granting or revoking that role from the pool is governance's on/off switch for permissionless liquidations. Most production keepers will use square() directly; liquidate() is the permissionless alternative for callers without the role, when governance has enabled it.

See Running a liquidator for the production setup.

What to read next

• How liquidations work — the on-chain call flow
• Running a liquidator — production setup
• PoW-gated public mode — the permissionless path