Liquidation

1. When your vault's individual collateral ratio drops below the minimum collateral ratio (MCR), the system flags your vault for liquidation.

2. The Stability Pool uses its funds to automatically repay the outstanding debt of your liquidated vault.

3. The collateral in your vault is seized by the system to cover the repaid debt.

4. Any surplus collateral remaining after debt repayment will be returned to you. This amount will be available for claim after the liquidation process is completed.

5. Collateral used to repay the debt is distributed as rewards to Stability Pool stakers based on their staked proportion.

6. Navigate to the vault details page. If multiple vaults are liquidated, the total remaining collateral (e.g. YBTC) across all affected vaults will be displayed.

7. In the position details section, click the "Claim" button. This action allows you to claim the total remaining collateral from all liquidated vaults in one transaction. Gas fees will apply.

8.Once the claim transaction is completed, the total remaining collateral will be sent to your wallet. All details of the liquidation and claim process will be recorded in your transaction history for future reference.

Please note that under extreme circumstances, if the liquidation process exhausts all YU liquidity from the Stability Pool, a redistribution process will occur. In this process, the system may allocate a portion of the liquidated vaults’ collateral and YU debt to your vaults based on the percentage of your vault’s collateral value out of the platform total collateral value. In order to manage your vaults’ risk, it is suggested to make sure your vault’s collateral ratio is not very close to the Min. Collateral Ratio.