Speaker: Viktor Yurov Abstract: In this presentation, I will discuss the complex mechanisms of liquidations in various decentralized finance (DeFi) protocols. Liquidations play a crucial role in maintaining the stability and solvency of DeFi platforms. I will address challenges such as market liquidity constraints, cascading liquidations, and high market volatility. Additionally, the focus will be on cross-chain swaps, different oracle architectures (Chainlink, PYTH network), transaction execution delays during network congestion, and the handling of bad debt. Using well-established protocols like AAVE, Compound, and Gearbox as examples, I will first examine typical liquidation module architectures, before moving on to modern innovative approaches. I will start by discussing the partial liquidation mechanism of Curve’s crvUSD and then delve into the architecture of Fluid Vault, which implements position grouping into ticks and bad debt absorption. In the final part of the presentation, participants will be introduced to some of the most interesting vulnerabilities identified in real-world audits. This session will be valuable for auditors, developers, and DeFi enthusiasts.
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