Hard V2 launched on April 8th, 2021, and users are now able to borrow BUSD. Eventually, all assets on the platform (BTCB, BNB, XRPB, KAVA, HARD, USDX) will be available to borrow on Hard Protocol making it a full-functional DeFi lending platform.

It is important for users to understand how liquidation works so they can take steps to avoid having it occur.

How liquidations work on Kava

When a user opens a CDP on the Kava app, the amount of USDX they mint relative to the amount of the collateral they supply will determine a liquidation price.

For example:

A user locks 40 KAVA to mint 80 USDX, and the resulting liquidation price is 3.01 USD/KAVA (based on market conditions at the time of publication). If the user mints an additional 10.751862 USDX (by clicking “SAFE MAX”), the liquidation price increases from 3.01 to 3.41 USD/KAVA. If they borrowed an additional 20 USDX instead of the Safe Max amount, then the liquidation price increases to 3.76 USD/KAVA.

Another way the liquidation price can rise is if a user withdraws some of their collateral without repaying any of the USDX loaned against it. Notice the difference in the change in liquidation price when a larger amount of collateral is withdrawn.

🔽DETAILS:

https://medium.com/kava-labs/liquidation-on-kava-and-hard-f5122d9fac58