Liquidation Risk

If a staker's c-ratio goes below the liquidation ratio, they are eligible to be flagged for liquidation. They will then have a set amount of time to raise their c-ratio back to the target c-ratio. If they fail to do so, they will be forced to liquidate with a penalty. If they raise their c-ratio above the target, their liquidation flag will be removed.

Stakers who experience liquidation will incur a penalty, with $RWAX in escrow and rUSD debt distributed to healthy stakers to ensure the system's long-term health. Users who flag stakers for liquidation are rewarded, incentivizing them to run bots that automatically flag stakers for liquidation.