Liquidation

When a trade reaches the liquidation price on EasyX, the liquidation engine identifies the position as eligible for liquidation on the blockchain. Liquidators then attempt to close these positions. The protocol is designed in a way that liquidations do not cause any price impact, which helps minimize potential losses.

For liquidators to incentivize closing overextended positions, a fixed fee is charged for liquidations, always slightly higher than gas fees. This additional fee serves as a motivation for liquidators to step in and efficiently close these risky positions.

In the future, the platform may introduce further incentives to attract external liquidators, enhancing the robustness of the liquidation engine and ensuring a well-functioning system that promotes overall stability and security.