LIQUIDATIONS 101: UNDERSTANDING CAPITAL LOSS AND PENALTIES IN DEFI LENDING MARKETS

Summary from the TLDR Crypto newsletter

This article compares liquidation processes in traditional DeFi lending markets with Fluid's approach. In markets like Aave, liquidations can result in users losing 50-100% of their collateral. In contrast, Fluid minimizes user losses by incrementally liquidating only as needed to bring a position below the liquidation threshold and applying a much smaller penalty.