When the collateral in an account falls below the current maintenance requirement, the account can be liquidated (or force closed).
Like with any other position change, a liquidation must sit in a pending state until the next oracle update. During this period however, a special lock is placed on the account so that the liquidation process may not be interfered with. The user may not open or close a new position (or be liquidated again) until the liquidation process is completely settled and the lock is cleared.
It is important to note that liquidations do not happen instantaneously as they must settle on the next oracle version, so this delay needs to be factored into the risk parameter settings when designing a Product.
At launch, incurring a liquidation will liquidate the entire collateral account within a specific market (i.e. the collateral balance in long-ETH market). However, in the future, we will look to implement partial liquidations.
Liquidators are immediately granted a liquidation reward equal to the maintenance requirement of the account times the
liquidationFeeupon the successful initiation of a liquidation.
Perennial does not take a protocol or product owner cut of the liquidation fee.