Collateral Liquidation

GopLend employs a own liquidation protocol to prevent liquidity leakage from the protocol. Liquidations occur when borrowers default on their loans, and the protocol must recoup its funds.

Protocol utilizes both internal liquidations based on NFT bets and market-maker liquidations

Here’s a breakdown:

• Internal Liquidation: The protocol uses internal rates with discounts to the NFT. NFTs end up going to the user who placed the bids

• Market-maker liquidations: Liquidations to a special protocol, NFTs fall to the owner of the collection

Internal Liquidation, bids

In the GopLend ecosystem, there is an opportunity to buy NFT at a discount with NFT bids. Discounts were created to attract users and at a critical time for the market to own more liquidity to close loan commitments. Bids can be placed at a discount of up to 20% off the NFT cost of the protocol.

At the same time, the liquidator is determined by different criteria:

1. Checking if the bid amount is sufficient for liquidation. (But size has no bearing on priority. Simply a sufficient amount is needed)

2. The size of the discount. (Affects priority. The smaller the discount - the higher the liquidation priority)

3. The time at which the bid was placed. (Affects priority last. If 2 people bid the required amount with the same discount, the NFT will go to the one who did it first)

This ensures a fair distribution and no bots