Context
Liquidated collateral needs efficient price discovery. Current liquidation at fixed discount may not reflect market conditions.
Current Limitation/Problem
Liquidations execute at a fixed discount regardless of market depth or urgency, potentially leaving value on the table.
Expected Outcome
A Dutch auction liquidation system where collateral price starts at market value and decreases over time until a buyer steps in.
Acceptance Criteria
- Design Dutch auction: start price = oracle price, decrease linearly over auction duration
- Configurable auction parameters: duration, min price, discount floor
- Parallel auctions for concurrent liquidations
- Auction settlement: buyer repays debt + premium, receives collateral
- No-show auction: gradual discount increase until liquidator steps in
- Integration with liquidation bot for automated bidding
- Auction analytics: avg premium, time-to-fill, slippage distribution
Technical Scope
contracts/lending-pool/src/liquidation/dutch_auction.rs - auction logic
backend/src/bots/liquidator/auction-bidder.ts - automated bidder
- Prisma:
AuctionEvent, AuctionSettlement models
- Edge cases: zero bids, oracle price change mid-auction, partial fills
Context
Liquidated collateral needs efficient price discovery. Current liquidation at fixed discount may not reflect market conditions.
Current Limitation/Problem
Liquidations execute at a fixed discount regardless of market depth or urgency, potentially leaving value on the table.
Expected Outcome
A Dutch auction liquidation system where collateral price starts at market value and decreases over time until a buyer steps in.
Acceptance Criteria
Technical Scope
contracts/lending-pool/src/liquidation/dutch_auction.rs- auction logicbackend/src/bots/liquidator/auction-bidder.ts- automated bidderAuctionEvent,AuctionSettlementmodels