The Liquidation Process allows third parties to participate in the health of the overall protocol by acting in their own interest (to receive the discounted NFT) and as a result, ensure loans are sufficiently collateralized.

Unlockd has a system that calculates in each situation the optimal liquidation setup, through traditional Auctions, Dutch Auctions with several variants and instant liquidation schemes through External Liquidation Pools.

Our followers and community members get notified when they can buy or bid for a collateral for a (safe for the protocol) discount. Everyone can participate in these liquidations.

As an independent liquidator, you can currently only bid in active Auctions to acquire a NFT at a discount. Dutch Auctions are still a feature under development.


The first bidder will receive a reward (bidFine) that is dynamic depending on the auctioned NFT price to incentivize bidding kickoff. The higher the price, the smaller the percentage received as a reward.

This reward only applies if there is a second bidder (who pays the bidFine) or the Borrower repays the debt + bidFine to save the liquidation and cancel the auction.

Learn more about the Liquidation Process:

pageLiquidation Process

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