Liquidations

LIQUIDATIONS
In abracadabra.money, every MIM is backed by a certain interest-bearing token (ibTKN). Unlike most protocols where all user's collateral is at risk of a liquidation event, here in Abracadabra, each Collateralized Debt Position (CDP) is isolated and only at risk of its own individual liquidation.
To clarify, if a user opens two CDPs with different ibTKNs they are able to borrow MIMs versus those ibTKNs individually, and set their risk tolerance accordingly. So if they believe a certain ibTKN has a higher chance of decreasing in value, they can choose to borrow less MIM versus that. 
To read more about how isolated lending Markets and Kashi works, and why they are different from traditional lending protocols, please refer here.
That being said, there are still times when a user's ibTKN value will decrease and be flagged for liquidation. In this event, 3rd party players (usually bots) can choose to repay all of the MIM debt in exchange for the ibTKN collateral used for that specific CDP. 
An Example (with made-up numbers)
Merlin the wizard has some yvWETH (an ibTKN). The current price per token of this collateral is $2000.00. Merlin is a mad wizard and he decides to borrow the maximum allowance of MIM tokens which he uses to buy ink for his magic spellbook. He is quoted a liquidation price of $1696.69
Zoltac the Dark, has a golem set to watch this CDP and is ready to liquidate at a moment's notice.
As fate would have it, the price of yvWETH drops to $1696.69, and Merlin’s collateral is no longer worth enough to cover his debt. So, Zoltac’s golem can go to work on this CDP and liquidate it. Zoltac pays off the owed MIM and takes those magical yvWETH tokens into his possession. However, Merlin is not terribly disappointed, as he still has those MIM tokens, well the ones he didn’t spend on magic ink, and he no longer has to pay off his debt.
The Liquidation Fee
Each market has its own liquidation fee, but in general ibTKNS with underlying stable coins will have a liquidation fee of 3% and ibTKNS with price action will have a liquidation fee of 12.5%
Liquidation Fee Sharing - This fee is the incentive given to the parties performing liquidations. Furthermore, 10% of these collected fees are hard-coded to be set aside for the weekly sSPELL rewards on particular pools.
From a user perspective, this fee is already considered in the calculations when quoting a Liquidation price for the respective ibTKNs. When users' liquidation price is reached they are liquidated. 
The Liquidation Price
The liquidation price is the price of your collateral at which you will be liquidated. If your collateral value decreases to a point where the liquidation price matches the price of the token that is used as collateral your position will be flagged for liquidation. The contract will not allow liquidators to perform liquidation above the liquidation price, meaning that the user's collateral is safe up until the stated total liquidation price.
Special Features 
There are a few important points of note regarding liquidations that should be highlighted very clearly. These points set Abracadabra apart and can determine whether users will be liquidated.
THEY ARE:
Abracadabra uses ibTKN that go up in value on their own regardless of price action.
MIM has interest so if a collateral, for some reason or another, does not increase in value, liquidations can happen. To reduce this risk, the team has selected ibTKNs that have a track record of increasing in value at a rate that far exceeds the interest rate on MIM debt.
The Price action of underlying tokens in some of the ibTKNs can be quite volatile. To reduce this risk, the team has set tokens that have price action to have a Maximum Collateral Ratio (MCR) of 75%
Abracadabra allows for the use of ibTKN with underlying stable coins as collateral with an MCR of 90%. Although it may be unlikely that these ibTKNs will decrease in USD value it’s not an impossibility as the underlying tokens may lose their price pegs from unforeseeable events.
Although any person can perform a liquidation, it has become standard that these functions are performed by bots. Because of this, there is no need for a UI on the main site for this function. 
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Contents

LIQUIDATIONS

An Example (with made-up numbers)

The Liquidation Fee

The Liquidation Price

Special Features