Lead · Risk Identification
What determines whether a protocol survives a crash was never whether it has a liquidation mechanism — it's whether that mechanism can still be executed the moment gas fees spike and liquidating stops being worthwhile for everyone.
Mia Fontaine
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July 23, 2026
Most people's understanding of liquidation mechanisms stops at the surface logic of 'collateral value falls below a threshold, gets auctioned off' — but what actually determines whether a protocol can withstand extreme market conditions lies in design details like the auction mechanism, liquidation incentives, and cross-protocol interconnection. These details show no visible difference under...