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Liquidation and Redeem
The Bend Protocol utilizes a scored 'health factor' for loans. The formula is outlined below.
When the 'health factor' of an NFT loan is below 1, anyone can trigger a liquidation in terms of an NFT Auction. The liquidator is called Bidder on Bend. The bidder will pay back all of the debt and receive the collateralized NFT in return.
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Meaning of Health Factor
The definition for Health Factor: (Floor Price * Liquidation Threshold) / Debt with Interests.
The risk level of the health factor:
- 0.0 < HF < 1.0: Dangerous, borrower maybe lose collateral if the debt is not repaid timely.
- 1.0 <= HF <= 1.5: Risky, borrower should repay partly the debt timely.
- 1.5 < HF < 2.0: Careful, borrower should pay attention and monitor the debt timely.
- 2.0 <= HF: Safe, borrower no need to worry and keep the debt last.
Liquidation will be triggered if the NFT loan's health factor is below 1.
NFT Loan State
Last modified 1mo ago
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