TsunamiX currently operates at a minimum collateralization ratio of 110%. If a trader's collateral's value drops below 110% of their debt on a position a, they are eligible for liquidation.

When opening a new order, you will see your Liquidation Price upon creation. If the asset you are longing for ends up below this value, or the asset you are shorting falls above this value - your entire position will be closed by TsunamiX & the collateral will be claimed as fees to be sent to TLP holders.

Ex 1: Liquidation Occurs

A trader has collateral worth $110 and debt worth $101.

110/101 = ~108.9%, which is less than 110% and therefore subject to liquidation

Ex 2: Liquidation Does Not Occur

A trader has collateral worth $111 and debt worth $100.

11/100 = ~111%, which is more than 110% and therefore NOT subject to liquidation

All positions are public and viewable meaning that anyone in the keeper network can audit which positions need to be liquidated at any point in time.

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