Liquidation-protection (ordinals)

If the health factor of your ordinals collateral falls below 1, your collateral may be triggered for auction. However, you can repay half of the debt within 144 blocks before the auction concludes, with a fee of either 0.005 BTC or 5% of the debt—whichever is greater—to redeem your ordinals.

This feature is crucial, as it ensures you won't wake up to find your ordinals taken, making it difficult to buy them back.

Example

  1. Alice purchased an ordinal for 0.2 BTC and borrowed 0.1 BTC from Bitty, using 50% of the floor price as collateral.

  2. Due to her busy schedule, Alice forgot to repay the loan before the auction started.

  3. To stop the auction, she repaid some BTC along with a 0.005 BTC fee (5% of the debt), successfully keeping her ordinals' health factor above 1.5.

Note that auction protection is not available during the first 3 blocks, meaning the ordinals owner has only 144 blocks to end the auction.

PreviousProof of Ownership (ordinals)NextGet value from the auctions (ordinals)

Last updated