Liquidation

Anyone can liquidate a position the moment its equity falls to 0.05% of its notional.

equity = margin + profit or loss at the mark liquidatable = equity ≤ 0.05% × notional

At 1000× leverage, liquidation can occur after a loss equal to half your margin. At 10×, it can occur after a loss of 99.5% of your margin. Liquidation consumes the full margin.

Liquidation happens in one step, at the current mark: there is no wait, no minimum age and no cooldown. Nothing is charged while a position is open, so its liquidation price is fixed when it opens.

An example

A 1000× ETH long with 100 Blood of margin has 100,000 notional and fills at a mark of 2,500.00. It becomes liquidatable at a mark of 2,498.75 or below, 0.05% under its entry.

What happens

  1. The position's whole margin is removed from the Maneki's Blood.
  2. The same amount of Energy is minted for the Maneki.
  3. The position is cleared. The Maneki's other positions are untouched.
  4. The caller receives a bounty from the KeeperFund.

A close can't beat it

If the mark is at or past your liquidation price when your close fills, the position is liquidated instead of closed, whatever your price protection. The same goes for Close now. To keep part of the margin, close before the mark gets there. Once a position has reached its liquidation price, its row shows the whole margin as the loss.

Keepers and the bounty

The bounty is 0.25 USDC plus 1% of the margin, at most 50 USDC. It comes from a separate KeeperFund that the operator tops up by hand, never from the pool or the liquidated margin, which stays in the pool. If the fund runs low, the bounty is whatever is left; if it is empty, liquidations still work; they are just unpaid. The operator runs keepers that watch every position's liquidation price, and anyone else may liquidate too.