What does a liquidator exchange?
A liquidator supplies the required KRW* to settle debt and receives collateral under the liquidation rules. They can keep that collateral or sell it. Before participating, the liquidator needs to estimate how much the collateral would actually sell for. The market price may differ from the oracle valuation. Expected profit or loss = collateral sale proceeds − funds used to settle debt − financing costs, swap fees, and gas The liquidator also needs to account for their trade’s price impact. A trade can look profitable at the quoted price even when the full amount cannot be traded at that price.Flash loans are one funding option
Liquidators can use their own capital or borrow through a flash loan. The flow below shows a general example of using a flash loan to fund a liquidation and repay the loan. It does not mean that batt provides an automated liquidation app or bot. The liquidator must complete every step, including repaying the flash loan principal and fee, in one transaction. If a required step fails, the transaction’s state changes revert. A failed transaction can still cost gas.Conditions for execution
For trades between KRW* and dollar assets, exchange rates and pair liquidity also affect the outcome.