Skip to content

Commit 95f3ec7

Browse files
CanonicalJPCanonicalJP
committed
fix: update docs to release v0.5.6
1 parent 90b06bc commit 95f3ec7

File tree

2 files changed

+10
-8
lines changed

2 files changed

+10
-8
lines changed

‎README.md‎

Lines changed: 1 addition & 0 deletions
Original file line numberDiff line numberDiff line change
@@ -14,6 +14,7 @@ A unified liquidity layer and modular architecture that enhances capital efficie
1414
## Documentation
1515

1616
- [Aave V4 Overview](./docs/overview.md)
17+
- [Aave V4 Docs](https://aave.com/docs/aave-v4)
1718

1819
## Architecture
1920

‎docs/overview.md‎

Lines changed: 9 additions & 8 deletions
Original file line numberDiff line numberDiff line change
@@ -225,20 +225,21 @@ Aave V4 introduces a redesigned liquidation mechanism that replaces the fixed cl
225225
## Key Differences from Aave V3
226226

227227
- **Target Health Factor vs Close Factor:** In V3, the default close factor is 50% (with a 100% close factor when HF < 0.95 or when liquidation amounts are under a given base currency threshold). Liquidators would typically repay half of a borrower’s debt and seize half of their collateral. V4 removes the default close‑factor: a liquidator only repays the debt required to bring the borrower back to the Target Health Factor determined by the Governor.
228-
- **Dynamic Dust Debt Handling**: Both V3 and V4 revert when the remaining amount is below a hard‑coded threshold, while dynamically adjusting the maximum debt that can be liquidated and, if the liquidator opts to fully repay, allow full repayment to prevent dust. However, V4 allows more flexibility because of removing the close-factor and facilitating the liquidation steps required to bring the position back to the target HF. Dust may still remain if either the collateral or debt reserve is fully liquidated.
228+
- **Dynamic Dust Handling during Liquidations**: Both V3 and V4 revert when the remaining amount is below a hard‑coded threshold, while dynamically adjusting the maximum debt that can be liquidated and, if the liquidator opts to fully repay, allow full repayment to prevent dust. However, V4 allows more flexibility because of removing the close-factor and facilitating the liquidation steps required to bring the position back to the target HF. Dust may still remain if either the collateral or debt reserve is fully liquidated.
229229
- **Dutch‑Auction Style Liquidation Bonus:** V3 applies a static liquidation bonus that does not depend on the borrower’s health factor. V4 introduces a variable liquidation bonus that increases linearly as the health factor decreases. Governance can specify two spoke‑wide parameters that shape the liquidation bonus: `healthFactorForMaxBonus` and `liquidationBonusFactor`.
230230

231231
## Parameters and Configuration
232232

233233
Aave V4 exposes several configurable parameters that influence liquidation:
234234

235-
| **Parameter** **Description** **Constraints** | | |
236-
| --------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------ |
237-
| `TargetHealthFactor` | A spoke‑wide value set by the Governor representing the HF to which a borrower should be restored after liquidation. Liquidators repay only enough debt to reach this HF under normal circumstances that do not result in dust collateral or debt remaining. | Must be ≥ the `HEALTH_FACTOR_LIQUIDATION_THRESHOLD` constant. |
238-
| `DUST_LIQUIDATION_THRESHOLD` | Hard‑coded threshold used to prevent extremely small leftover debt. The maximum debt that can be liquidated is increased to ensure that debt or collateral dust less than this threshold does not remain unless the corresponding respective collateral or debt reserve is fully liquidated. | Hard‑coded constant set to 1_000 USD in base units. |
239-
| `maxLiquidationBonus` | Per reserve defined maximum liquidation bonus for a collateral, expressed in basis points (BPS). A value of 105_00 means there is 5_00 extra seized collateral over the amount of debt repaid in base currency. | Must be ≥ 100_00 |
240-
| `healthFactorForMaxBonus` | Spoke‑wide value expressed in WAD units defining the HF below which the max bonus applies. It must be less than or equal to `HEALTH_FACTOR_LIQUIDATION_THRESHOLD` to avoid division‑by‑zero. | `healthFactorForMaxBonus` < `HEALTH_FACTOR_LIQUIDATION_THRESHOLD`. |
241-
| `liquidationBonusFactor` | Spoke‑wide percentage (expressed in BPS) specifying the fraction of the max bonus earned at the threshold `HEALTH_FACTOR_LIQUIDATION_THRESHOLD`. It defines the minimum bonus; e.g., a factor of 80_00 yields a bonus equal to 80% of the max bonus when HF equals the liquidation threshold. | liquidationBonusFactor must be ≤ 100_00 |
235+
| **Parameter** | **Description** | **Constraints** | | |
236+
| ---------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------- | --- | --- |
237+
| `TargetHealthFactor` | A spoke‑wide value set by the Governor representing the HF to which a borrower should be restored after liquidation. Liquidators repay only enough debt to reach this HF under normal circumstances that do not result in dust collateral or debt remaining. | Must be ≥ the `HEALTH_FACTOR_LIQUIDATION_THRESHOLD` constant. |
238+
| `DUST_LIQUIDATION_THRESHOLD` | Hard‑coded threshold used to prevent extremely small leftover of debt and/or collateral. The maximum debt that can be liquidated is increased to ensure that debt or collateral dust less than this threshold does not remain unless the corresponding respective collateral or debt reserve is fully liquidated. | Hard‑coded constant set to 1_000 USD in base units. |
239+
| `maxLiquidationBonus` | Per reserve defined maximum liquidation bonus for a collateral, expressed in basis points (BPS). A value of 105_00 means there is 5_00 extra seized collateral over the amount of debt repaid in base currency. | Must be ≥ 100_00 |
240+
| `healthFactorForMaxBonus` | Spoke‑wide value expressed in WAD units defining the HF below which the max bonus applies. It must be less than or equal to `HEALTH_FACTOR_LIQUIDATION_THRESHOLD` to avoid division‑by‑zero. | Must be < `HEALTH_FACTOR_LIQUIDATION_THRESHOLD`. |
241+
| `liquidationBonusFactor` | Spoke‑wide percentage (expressed in BPS) specifying the fraction of the max bonus earned at the threshold `HEALTH_FACTOR_LIQUIDATION_THRESHOLD`. It defines the minimum bonus; e.g., a factor of 80_00 yields a bonus equal to 80% of the max bonus when HF equals the liquidation threshold. | Must be ≤ 100_00 |
242+
| `liquidatable` | Determines if a given reserve can be seized during liquidation when used as collateral. This flag can be adjusted by priviledged roles depending on the scenario and could be used to replicate use cases such as the V3 oracle sentinel and the V3 unpause grace period. | Must be `true` or `false` |
242243

243244
## Liquidation Process in V4
244245

0 commit comments

Comments
 (0)