Automated Liquidation Mechanism
The Trove needs to maintain a Minimum trove Collateral Ratio (MCR) which depends on the overall risk level computed by the Bonq Risk Model here .
If the Trove has insufficient collateralized debt positions, there is an instant liquidation mechanism.
Liquidation mechanism is algorithmic, requiring no buyer or bidder to buy the collateral which makes the liquidation process very efficient
Liquidated borrowers keep their BEUR, and all their collateral is distributed to the Stability Pool or, in the case of insufficient Stability Pool liquidity, distributed to the other troves with the same collateral.