Liquidation Logic

The precise behavior of liquidations depends on the initial collateralization ratio (ICR) of the Vault being liquidated and global system conditions: the total collateralization ratio (TCR) of the system, the size of the Stability Pool, etc.

ICR > TCR	Not liquidatable.
ICR < IMCR	Try to offset through the stability pools and redistribute anything remaining.
ICR ≥ IMCR	Normal Mode: Not liquidatable. Recovery Mode: Try to offset through the stability pools and redistribute anything remaining, but only a fraction (IMCR * debt's USD value) of the Vault's collateral, the rest will be transferred into the CollSurplusPool, from where it is claimable by the Vault owner.

Stability Pool depositors gain collateral tokens over time as liquidated debt is canceled with their deposit. When they withdraw all or part of their deposited jAssets or top up their deposit, the system sends them their accumulated collateral gains.

Similarly, a Vault's accumulated gains from liquidations are automatically applied to the Vault when the owner performs any operation - e.g., adding/withdrawing collateral or issuing/repaying jAssets.