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Liquidus: A Solution for Liquidation in Margin Markets on Serum DEX

Liquidus is an on-chain liquidation protocol designed specifically for Serum DEX margin markets and lending platforms on the Solana network.

The protocol offers liquidity through its engines to effectively manage liquidations for Solana and Serum based margin and borrowing projects. This ensures that projects have a reliable backend system to handle settlement liquidity.

The Role of the Liquidator in Liquidation Process

In the liquidation process, the liquidator plays a crucial role. The liquidator identifies overexposed accounts, prepares them for liquidation, provides funds to cover the liabilities of the liquidated accounts, and receives collateral from the liquidated account in return. Profits are shared through LIQ LP staking rewards.

Powered by Solana

Solana is a high-performance and permissionless blockchain that belongs to the next generation of cryptocurrency technology. Solana operates through Proof of History (PoH), which utilizes sequential functions. Currently, Solana can handle over 50,000 transactions per second with extremely low latency and has a theoretical maximum capacity of over 700,000 transactions per second.

Serum Ecosystem

Serum is a decentralized exchange (DEX) and ecosystem that brings unprecedented speed and low transaction costs to decentralized finance. Built on Solana, Serum is fully permissionless. LIQ Protocol strengthens the Serum Ecosystem by managing liquidation events and balancing margin accounts across different lending platforms.

The Role of the Liquidator in Liquidation Process

The liquidator is a program responsible for initiating the liquidation process. It operates in a permissionless and decentralized manner. The liquidator identifies overexposed accounts, prepares them for liquidation, provides funds to cover the liabilities of the liquidated accounts, and receives collateral from the liquidated account in return.

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Utility of Liquidus Protocol

Liquidus Protocol offers the following utility:

Users can provide liquidity to Liquidus by staking LP tokens and earn fees from the liquidators' profits.

By participating in the liquidation process, Liquidus Protocol provides liquidity for the further advancement of the ecosystem and builds the "insurance fund" for the liquidation engine.

Liquidus Protocol implements a limited governance model that allows stakers to make decisions regarding the Liquidation Engine's process and holdings, including determining markets and pairs for the protocol to manage.