# Liquidation Discount

To expedite the liquidation of all positions, certain factors are considered to incentivize liquidators to act swiftly. The magnitude of the discount is determined by two factors:

**Time:**The duration since the position became liquidatable. The discount grows at an approximate rate of 1% every 60 seconds. This results in an additional discount of around 10% after 10 minutes have passed. The discount rate of time factor is capped at 30%, or around 30 minutes.

$\text{t}$ = # minutes since position is marked as liquidatable

**Debt Ratio:**How unhealthy the position is. The aim is to provide greater incentives for the liquidation of positions that are riskier of going underwater. Each asset/strategy has its own MinDesiredHealthFactor (MDHF) which is the factor that determines whether the position is underwater and is used to calculate the discount amount using the following formula:

$\text{HF}$ = Health Factor = 1 / Debt Ratio

$\text{MDHF}$ = Min Desired Health Factor

In summary, by including both the time factor and health factor together. The total liquidation bonus is determined by the following formula

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