RFQ based liquidations needs to be the future. All liquidations reviewed in the last week on
@flyingtulip_ either closed the position at dollar for dollar parity or in some cases, the RFQ filled with positive price, meaning less debt seized. The standard liquidation flow is; Position becomes liquidatable Repay x amount of debt Claim collateral Because the above is not market aware it has to make some assumption around liquidation bonus to make it potentially attractive in high friction markets. FT's flow is; Position becomes liquidation. Engine creates an RFQ offer to sell collateral for minOut debt. Best quote fills This means almost no haircut / liquidation penalty for the user, $ for $ repayment, and only the minimum amount to return to healthy. If this was a normal trade and not RFQ, MEV Would likely fill at exactly minOut (which would have the same impact as liquidation bonus), however since RFQ can have multiple offer submissions, the prot