diff --git a/MEV/liquidations-notes.md b/MEV/liquidations-notes.md index 951d19f..0b69d6b 100644 --- a/MEV/liquidations-notes.md +++ b/MEV/liquidations-notes.md @@ -1,5 +1,7 @@ ## Liquidations +
+ * Lending protocol (e.g. Aave or Maker) liquidations present a well-known MEV opportunity. * They work by requiring users to deposit some collateral. Users can then borrow different assets and toekns from others depending on what they need, up to a certain amount of their deposited collateral. * As the value of a borrower's collateral fluctuates, if the value of the borrowed assets exceeds the value of the collateral, the protcol allows anyone to liquidate the collateral (similar to margin calls in traditional finance).