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Overview

When a borrower’s health factor drops below 1.0 in Pooled Markets, anyone can call liquidationCall on the Pool contract to repay part of the debt and receive discounted collateral. This guide covers the mechanics and provides integration examples.
For Mewler (Euler V2) liquidation mechanics, see the HypurrFi Markets Agent Reference.

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How Liquidation Works

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Health Factor

Health Factor = (Σ collateral_value × liquidation_threshold) / Σ debt_value
  • HF > 1.0 → position is safe
  • HF = 1.0 → at liquidation threshold
  • HF < 1.0 → position can be liquidated
Query a user’s health factor: 
const pool = new ethers.Contract(POOL_ADDRESS, poolABI, provider);
const data = await pool.getUserAccountData(userAddress);
// data.healthFactor is in wei (1e18 = 1.0)
const healthFactor = Number(data.healthFactor) / 1e18;

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Close Factor

Liquidators can repay up to 50% of the borrower’s debt in a single liquidationCall. Setting debtToCover to type(uint256).max will liquidate the maximum allowed amount.

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Liquidation Bonus

Liquidators receive collateral at a discount. The bonus varies per asset and is encoded in the reserve configuration bitmap (bits 32–47). Typical values are 5–10%.

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Pool.liquidationCall

function liquidationCall(
    address collateralAsset,
    address debtAsset,
    address user,
    uint256 debtToCover,
    bool receiveAToken
) external
ParameterDescription
collateralAssetAddress of the collateral reserve to seize
debtAssetAddress of the debt reserve to repay
userAddress of the borrower being liquidated
debtToCoverAmount of debt to repay. Use type(uint256).max for maximum (50% of debt)
receiveATokentrue to receive hyTokens, false to receive the underlying asset
The liquidator must approve() the Pool contract to spend debtToCover of the debtAsset before calling liquidationCall.

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Integration Example

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1. Monitor Positions

const pool = new ethers.Contract(POOL_ADDRESS, poolABI, provider);

async function findLiquidatablePositions(users: string[]) {
  const liquidatable = [];
  for (const user of users) {
    const data = await pool.getUserAccountData(user);
    const hf = Number(data.healthFactor) / 1e18;
    if (hf < 1.0) {
      liquidatable.push({
        user,
        healthFactor: hf,
        totalCollateral: data.totalCollateralBase,
        totalDebt: data.totalDebtBase,
      });
    }
  }
  return liquidatable;
}

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2. Calculate Profitability

// Fetch reserve config to get liquidation bonus
const config = await pool.getConfiguration(collateralAsset);
// Liquidation bonus is in bits 32-47 of the configuration bitmap
// A value of 10500 means 105% (5% bonus)
const liquidationBonus = (Number(config) >> 32) & 0xFFFF;
const bonusPercent = (liquidationBonus - 10000) / 100; // e.g., 5%

// Profit = (collateral received × bonus%) - gas cost

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3. Execute Liquidation

const signer = await provider.getSigner();
const pool = new ethers.Contract(POOL_ADDRESS, poolABI, signer);

// Approve debt token spend
const debtToken = new ethers.Contract(debtAsset, erc20ABI, signer);
await (await debtToken.approve(POOL_ADDRESS, debtToCover)).wait();

// Execute liquidation
const tx = await pool.liquidationCall(
  collateralAsset,
  debtAsset,
  borrowerAddress,
  debtToCover,     // or ethers.MaxUint256 for max
  false            // receive underlying asset (not hyTokens)
);
await tx.wait();

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Key Contract Addresses

ContractAddress
Pool0xceCcE0EB9DD2Ef7996e01e25DD70e461F918A14b
PoolAddressesProvider0xA73ff12D177D8F1Ec938c3ba0e87D33524dD5594
HyFiOracle0x9BE2ac1ff80950DCeb816842834930887249d9A8
ProtocolDataProvider0x895C799a5bbdCb63B80bEE5BD94E7b9138D977d6

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References