Each deposited asset contributes its oracle value multiplied by its liquidation-threshold percentage to the account’s collateral boundary. Expressing that combined boundary as a percentage of total collateral gives the account’s weighted liquidation threshold. Changes in the relative values of different collateral assets can therefore change that percentage even when their individual threshold settings remain unchanged. In the published devel contract code, each borrow’s oracle value is also multiplied by its configured borrow weight before the total is compared with the collateral boundary. A borrow weight above one makes that debt count for more than its dollar value.

The LTV limit for opening or increasing a loan is a separate constraint from the liquidation threshold. An account can lose the ability to borrow more before becoming liquidatable. Suilend’s Liquidations documentation identifies the Health Bar reaching the light blue threshold line as the point of eligibility; that display alone does not establish that a liquidation transaction has completed.

The relevant parameters belong to the selected lending market and borrowing account. A threshold shown for one collateral asset does not necessarily describe an account containing several assets, and tokens held separately in a wallet do not automatically count as posted collateral.

A falling collateral price reduces the value supporting the loan. A rising price of the borrowed asset increases the oracle value of the debt, even if the borrower has taken no additional tokens. Debt remains denominated in the borrowed asset, so its original dollar value does not fix the eventual repayment cost.

Accrued interest also increases the amount owed. Suilend uses variable borrowing rates that respond to pool utilization, so an opening APR cannot establish the cost of holding a loan for a future period.

SpringSui LST/SUI looping strategies have a specific distinction: the Strategies documentation states that both sides use the SUI price feed and excludes those loops from its separate oracle-risk warning. They still face liquidation risk if accumulating borrowing interest pushes the position beyond its liquidation threshold.

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A liquidation repays debt in the borrowed asset using funds supplied by the liquidator. Collateral leaves the borrowing account to cover that repayment and the liquidation incentive. The borrower consequently retains less debt and less collateral.

Suilend’s Liquidations explanation describes a partial repayment of 20% of the loan and a bounty of 5% of the value repaid. The 5% calculation uses the repaid portion as its base. In the published devel contract code, the collateral reserve sets a liquidator bonus and a separate protocol liquidation fee. The usual repayment cap is 20% of the account’s weighted borrowed value, limited to the selected borrow. That borrow may be repaid in full when its oracle value is $100 or less or when the combined bonus and fee are capped to avoid worsening the account’s LTV. The supplied repayment amount and selected collateral deposit can further limit repayment. The applicable reserve settings and executed amounts matter when reconciling an actual event.

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Why does collateral fall by more than the repaid debt?

Assume a hypothetical account is already eligible for liquidation and has USDC debt, including accrued interest, with an oracle value of $10,038. Apply the 20% repayment and 5% bounty model described in Suilend’s Liquidations explanation. Hold oracle prices fixed throughout the calculation, assume sufficient collateral to cover the repayment and bounty, and include only these two components. The amounts below are dollar valuations, rather than counts of collateral tokens.

The account gives up $2,107.98 of collateral value to retire $2,007.60 of debt. Its net position value falls by $100.38 under these assumptions. Changing the starting debt value scales these results proportionally at the same repayment share and bounty rate; a different bounty rate changes the extra collateral taken. Any separately applicable fee must also be included when reconciling an actual liquidation.

The remaining $8,030.40 of debt does not establish whether the account is healthy. Eligibility must be assessed against the collateral that remains, using the applicable parameters and updated valuations.

Repaying borrowed tokens reduces debt, while supplying additional eligible collateral increases the collateral contribution to the account’s health calculation. These actions must complete and affect the borrowing account to change its position. Removing collateral reduces the support available to outstanding debt.

A partial liquidation leaves the remaining balances exposed to subsequent price movements and interest. A reduction in the account’s debt-to-collateral ratio does not itself mean that a collateral asset’s liquidation-threshold parameter has changed.

Liquidation can leave bad debt when market conditions prevent the collateral from covering the outstanding loan. Suilend also identifies incorrect oracle prices as a cause of wrongful liquidations.

Isolated markets help contain exposure to the main market, but their positions retain liquidation, oracle, liquidity, and smart contract risks. Uninsured pools can also face loss socialization, under which a shortfall is distributed among affected depositors. Market isolation does not establish protection against losses within that market.