Role of Bots in the Liquidation Process

Blueberry is supported by automated mechanisms, known as liquidation bots, which are programmed to execute liquidations instantaneously when positions meet the liquidation criteria. These bots utilize flash loans—a feature in DeFi that allows for borrowing without collateral, provided that the liquidity is returned within the same transaction—to efficiently liquidate at-risk positions.

Liquidation Incentives

To encourage participation and prompt execution of liquidations, the protocol provides incentives, usually in the form of a percentage of the liquidated assets. These rewards compensate liquidators for contributing to the health and stability of the protocol by ensuring that lenders' funds are protected.