Liquidatable
This page describes the intended design, not shipped software. The only behaviour live on-chain today is synthetic position creation. The $TRANT token, bonds, staking, liquidity pools and mining, trading, liquidation, and oracle mechanics described across these pages are specified but not built or deployed. See Technical overview.
The liquidatable layer of the EMP is what keeps every synthetic fully backed without the protocol stepping in. It lets anyone remove a position that has fallen below its minimum collateralisation ratio.
Liquidation
A liquidator submits a liquidation against a sponsor position and posts a bond. If the liquidation is correct and undisputed through its liveness window, the liquidator takes a reward out of the position's collateral. This gives keepers a standing incentive to watch open positions, the dashboard lists other users' positions for exactly this reason.
Dispute
A sponsor who thinks a liquidation is wrong, or any third party, can dispute it by posting a matching bond. The dispute goes to the optimistic oracle for a reference value:
- if the position was in fact healthy, the disputer wins the liquidator's bond and the position is restored;
- if the position was under-collateralised, the liquidation stands and the disputer loses their bond to the liquidator.
Both sides have capital at risk, so neither a frivolous liquidation nor a frivolous dispute is cheap.