RUJI Liquidations - Bid on Liquidated Collateral

Q: What is RUJI Liquidations? RUJI Liquidations is the first public marketplace where anyone can bid on at-risk collateral and buy it at a discount through Dutch auctions, no bots or coding needed.

By doing this, users can get discounted crypto while helping keep the Rujira ecosystem healthy and solvent. Creating competition on liquidated collateral also means that liquidations tend to happen at a better price than on other platforms for borrowers who get liquidated, meaning they are losing less in the event of a liquidation.

You can access it here: [coming soon].

For more details, visit the RUJI Liquidations docs.

Q: What makes Rujira’s Liquidations different from CEXs and other DeFi platforms? In DeFi, most liquidation systems are only accessible via sophisticated MEV bots that act first and take all the profit. On CEXs, liquidations are a black box with most volumes and profits captured by the platforms themselves and a few permitted market makers, leaving regular users out.

RUJI Liquidations lets anyone place bids at the discount they choose. It does not depend on speed or bots, and liquidations are distributed fairly among all participants, starting from the lower discount (most favourable to the liquidated borrowers) and moving to higher discounts as the lower discount bids get filled.

This makes liquidations fair, and gives everyone an equal chance to take part.

Q: Whose liquidations am I buying? You are buying collateral from users whose debt positions have passed their safe Adjusted LTV* level, for example, from RUJI Lending or other leveraged products on Rujira. Once these positions get liquidated, part of the collateral gets sold via a market order on the orderbook and people can place bids at a discount to current market price to catch the wicks caused by liquidations.

Proceeds from the collateral sold are used to repay part of the users’ debt and bring back their positions to a healthy LTV level. Your bids allow you to buy the local low at a discount while helping to protect the system solvency.

*Adjusted LTV: Adjusted Loan-to-Value ratio, it’s a measure of a debt position’s health. For example if you have $100 worth of BTC collateral, the collateral ratio on BTC being 70% (meaning you can borrow maximum $70 for every $100 worth of collateral), then your Adjusted Collateral Value is $100 * 70% = $70. If you borrow $50 in USDC, your Adjusted LTV would be $50 / $70 = ~71.4%. If the price of BTC drops and your Adjusted Collateral Value is now $48, your new Adjusted LTV would be ~104%, which is past the max limit of 100%, meaning part of your collateral can be liquidated to repay some of your debt.

Q: What happens to the bid I open? When you place a bid on RUJI Liquidation, whether it’s to liquidate short or long positions, it gets placed as a Tracking order on our orderbook. Whenever a liquidation happens, the collateral gets sold on the orderbook via a market order and you can catch the discount with your bid, depending on the size of the wick the liquidation creates and where other people's bids are.

Q: How can I make sense of the heatmap? The heatmap shows at which price level most liquidations are likely to happen, where most bids are placed and how deep the queue is at each discount level. It helps you decide the best discount to set, lower discounts fill faster, higher discounts offer bigger potential gains but are less likely to get filled.