Your assets may be liquidated when the risk value of your account reaches 100.
The liquidator will repay your debt and charge fees equal to 108% of the debt repaid in jTokens.
The liquidator can pay back at most 50% of a user’s debt at a time, but the user’s assets can be liquidated multiple times until the risk value falls below 100.
Example:
The calculation process in this example is simplified for clarity.
Time A:
A user supplies $100 worth of SUN tokens with a collateral factor of 50% and $200 worth of USDC tokens with a collateral factor of 75% on JustLend DAO. Therefore, the user can borrow up to $200 worth of tokens (Borrow Limit = $100 × 50% + $200 × 75% = $200).
The user then borrows $90 worth of TRX tokens and $50 worth of JST tokens from JustLend DAO. At this point, the total value of tokens that this user has borrowed is $140 (Total Borrow = $90 + $50 = $140).
In this case, the user’s Risk Value = Total Borrow / Borrow Limit * 100 = $140 ÷ $200 × 100 = 70.
Time B:
While the value of SUN and USDC remains unchanged, the value of TRX and JST both has increased by 50%.
At this point, the risk value of the user’s account has changed. Risk Value = Total Borrow / Borrow Limit * 100 = ($90 x 150% + $50 x 150%) ÷ ($100 x 50% + $200 x 75%) × 100 = 105. As the value has exceeded 100, the user’s asset will therefore be liquidated.
The liquidator repays 50% of the user debt ($105 worth of TRX), and charges a fee equal to 108% of the debt repaid, or $113.4 in USDC.
After the liquidation, the assets supplied by the user are $86.6 worth of USDC tokens ($200 - $113.4 = $86.6) and $100 worth of SUN tokens.
The user’s remaining debt is $30 worth of TRX tokens ($90 x 150% - $105 = $30) and $75 worth of JST tokens ($50 x 150% = $75). At this point, the user’s Risk Value = ($30 + $75) ÷ ($100 x 50% + $86.6 x 75%) × 100 = 91.34. As the risk value is now below 100, the user’s assets will not be further liquidated. However, liquidation will occur if the risk value exceeds 100 again.