Liquidation Opportunity Program

The Liquidation Opportunity Program is designed to incentivize community members to run liquidation bots. Intentionally under-collateralized positions will be created to reward community members for keeping the UMA system secure and appropriately collateralized.

When is the next opportunity?#

On Friday, August 14th at 11:30am Pacific Time (i.e. San Francisco time), Risk Labs will intentionally create an under-collateralized position, creating an on-chain profit opportunity of approximately $2,000 for any liquidator bot to take.

What do I need to liquidate a position?#

You'll need to make sure you have an account loaded with enough yUSD to liquidate the position, and also enough ETH to pay for the necessary gas costs associated with the liquidation transaction.

How do I run a bot?#

The in-depth tutorial here will walk you through the process of running a bot through various methods. However, the most expedient way to run a bot is from the Docker image. This process is detailed in the Docker section of that tutorial.

For your convenience, however, the following is a quick summary of the important points.

Minimal quick start guide#


This short guide only teaches you how to run a bot. To take advantage of the liquidation opportunity, you will have to tweak your polling interval and liquidation sensitivity amongst other variables.

First, create a file to set the appropriate configuration for your liquidation bot. Please edit the following example with your own values. You can reference the tutorial for appropriate values.

COMMAND=yarn truffle exec ./packages/liquidator/index.js --network mainnet_privatekey

Once you have a properly configured .env file, use the following commands to pull the Docker image and run a container with your specified configuration.

# Pull the latest docker container image
docker pull umaprotocol/protocol:latest
# Start the liquidator bot Docker container
docker run --name liquidator-bot -d --env-file ./example.env umaprotocol/protocol:latest
# *your container hash should print here*
# List logs from running bot:
docker logs <your container hash>

When you are familiar with using the Docker image, you can deploy the Docker image on any cloud service provider of your choice, or alternatively you could run it locally on your machine.

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