Auctions
FOR KEEPERS, NOT FOR BORROWERSA backstop, not something you use. If a loan grows too large against its bonds, they are sold to repay the lender pool and any surplus goes back to the borrower. Full detail: how liquidation works.
- Step 1: 100%Opens at the lot's NAV
- Step 2: 6hFalls in a straight line, all the way
- Step 3: 68%The price stops at the floor
- Step 4: 48h · 14dNo bid: re-struck for up to 48h, then a workout. 14 days bounds the debt, not the bonds.
- Step 1: LOT OPENS
The whole position is sold as one lot.
- Step 2: PRICE FALLS
The price decays linearly from 100% of NAV to a floor of 68%, over 6 hours.
- Step 3: IF SOMEONE BIDS
The winner pays USDC for the lot. That repays the debt first, then the 5% liquidation penalty on it, and any surplus goes to the borrower. DexFi's whitelist gates every bond transfer, so a winner it has not whitelisted can stake, deposit and borrow against the bonds but cannot sell them peer to peer.
- Step 4: IF NOBODY BIDS
A lapsed lot can be restarted at the current NAV for up to 48 hours from when it first opened. After that it falls back to DexFi manual redemption, in a workout queue.
- Step 5: AFTER A WORKOUT
Repaying a workout in full closes the loan but does not by itself return the bonds: the owner decides where the lot goes, and no deadline binds that. Anyone can force-close an unpaid workout after 14 days, writing the debt still owed down as a loss. That deadline covers the debt, not the bonds.
Reading the auction contract on Base. Anything below is illustrative, not from chain.
SHOW ME WHAT A LIVE LOT LOOKS LIKEILLUSTRATIVE · NOT FROM CHAIN
An invented auction, to show the shape of a live lot without pretending one exists.
Inner ring: the price now, split as a sale would pay it, out of a full turn at the opening price. The two ticks are the debt plus the 5% penalty, and the debt alone. Every bid down to the floor covers the debt and the penalty.
One square per bond, coloured by where its share of a sale at this price goes, in the order the contract pays: the debt, then the 5% penalty on it, then the borrower.
- Lender pool $4,074repays the debt
- Caller $10250% of the penalty
- Insurance fund $102the rest of the penalty
- Borrower $2,504what is left
- Price, whole lot
- Floor
- Debt on the lot
TABLE VIEW
| Hour | Whole lot | Of NAV |
|---|---|---|
| 0h | $7,835.51 | 100% |
| 1h | $7,417.62 | 94.7% |
| 2h | $6,999.73 | 89.3% |
| 3h | $6,581.83 | 84% |
| 4h | $6,163.94 | 78.7% |
| 5h | $5,746.04 | 73.3% |
| 6h | $5,328.15 | 68% |
Floor $5,328.15. Debt on the lot $4,074.47.
A price that covers the debt but not the 5% penalty leaves the penalty short, not the lender pool. Only a price below the debt leaves a shortfall, written off against the insurance fund first and the pool's lenders after it.