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What is Liquidation & Liquidation Bounty?
Liquidation occurs when leveraged positions on Homora V2 (>1x) have a Debt Ratio >= 100%. When this happens, liquidators can liquidate these positions by repaying the debt (partially or fully) and earn 100% of the repaid fund plus additional liquidation incentives back. The liquidation varies for each liquidity pool.
For higher-volatile assets eg. WETH, WBTC, liquidation bounty can be as close to ~5% of the debt amount the liquidator repaid; while for lower-volatile assets eg. DAI, USDT, USDC, liquidation bounty is lower but can be as close to ~3% of the debt amount the liquidator repaid.
Note: The liquidation bounty will be paid in the form of LP tokens.
For instance, if liquidators liquidate 100 ETH by repaying 100 ETH. Liquidators will get LP token back in a value equivalent to ~102.5 ETH (liquidation bounty for ETH = 2.5%)
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