1) Is 13% liquidation fee calculated towards the debt or the collateral?
2) A CDP will be liquidated at 150% ratio. Then I pay 13% liquidation fee. What happens with the 37% of my collateral left (150% -13% = 37%). Do I get it back?
3) If yes -> as long as I understand, if my CDP gets liquidated, I am only loosing 13% liquidation fee. Because I keep the withdrawn DAI + 37% of the collateral.
Collateral = 1 ETH = 200$
Debt = 100 DAI
Eth price falls to 150$ and the CDP gets liquidated.
I am keeping the 100 DAI. What is the amount of liquidation fee and how much ETH I get back too?
It is pretty annoying that basic and simple math like this is not explained anywhere in a structured and convenient way.
Let's fill that gap...
Originally from MakerDAO https://ift.tt/2xpKtE1
Learn more about Maker, chat with the team, and have your say in shaping the future of commerce on the blockchain.