Liquidations

How Liquidations Work at Aesyx

Liquidation happens when a Borrower’s Collateralization Ratio (CR) falls too low.

The Collateralization Ratio (CR) measures how much your Collateral is worth compared to your borrowed $AXD:

Example:

• You deposit $1,500 worth of sAVAX.

• You borrow 1,000 $AXD.

• Your CR = (1,500 ÷ 1,000) × 100% = 150%.

Each type of supported Collateral on Aesyx has its own minimum required CR to avoid Liquidation.

Tips to Avoid Liquidation

• Watch Your CR: Stay informed about the value of your Collateral.

• Add More Collateral: Top up your Trove if prices fall.

• Repay Some Debt: Paying down $AXD debt boosts your CR.

What Happens During a Liquidation

1. Collateral Seizure: If your CR falls below the Liquidation Threshold, your Collateral is seized to cover your debt (plus a bonus for Stability Pool depositors).

2. You Keep Your $AXD: Any $AXD you previously borrowed remains yours.

3. Trove Closure: Your Trove is closed out through Liquidation.

Liquidation Example: Start to Finish

• A Borrower’s CR drops below the safe threshold.

• $AXD from the Stability Pool is burned to cancel the Borrower’s debt.

• Collateral is distributed among Stability Pool depositors.

• Depositors gain new Assets — and a liquidation bonus — for helping keep Aesyx stable.