dydxprotocol / Liquidator
Programming Languages
dYdX Liquidator
Bot to automatically liquidate undercollateralized and expired dYdX accounts.
Usage
Docker
Requires a running docker engine.
docker run \
-e WALLET_ADDRESS=0x2c7536E3605D9C16a7a3D7b1898e529396a65c23 \
-e WALLET_PRIVATE_KEY=0x4c0883a69102937d6231471b5dbb6204fe5129617082792ae468d01a3f362318 \
-e ETHEREUM_NODE_URL=https://mainnet.infura.io/v3/YOUR_INFURA_KEY \
-e SOLO_LIQUIDATIONS_ENABLED=true \
-e PERP_LIQUIDATIONS_ENABLED=true \
-e SOLO_EXPIRATIONS_ENABLED=false \
dydxprotocol/liquidator
Overview
This service will automatically liquidate undercollateralized and/or expired accounts on dYdX.
This bot works for Solo (Margin-Trading) and/or Perp (Perpetual Market) accounts. Use the envvars SOLO_LIQUIDATIONS_ENABLED, SOLO_EXPIRATIONS_ENABLED, PERP_LIQUIDATIONS_ENABLED to control what kind of liquidations to perform.
Liquidations on dYdX happen internally between Accounts, so you will need an already-funded dYdX Account to use this liquidator bot. If you use the default of SOLO_ACCOUNT_NUMBER=0, you can fund your dYdX Margin (Solo) or Perpetual (Perp) Account on trade.dydx.exchange/balances.
Successfully liquidating Accounts will modify your dYdX Account balances. You can liquidate assets you do not have in your Account provided you have another asset as collateral, which will just cause your dYdX Account Balance to go negative in that asset.
Solo Liquidations
Liquidations on Solo reward a 5% spread on top of the current oracle prices for the assets being liquidated and used as collateral. Example:
Undercollateralized Account:
+2 ETH
-350 DAI
Liquidator Account:
+100 ETH
-1000 DAI
Oracle Prices:
ETH Oracle Price: $200
DAI Oracle Price: $1
Fully liquidating this account would cause 350 DAI to be paid to zero out its balance, and would reward 350 DAI * ($1/DAI / $200/ETH) * 1.05 = 1.8375 ETH as payout. After the liquidation the account balances would be:
Undercollateralized Account:
+0.1625 ETH
0 DAI
Liquidator Account:
+101.8375 ETH
-1350 DAI
Perp Liquidations
Perp Liquidations allow the liquidator to fully subsume any account with a collateralization that falls below 107.5%. After the liquidation, 20% of any profits go towards a dYdX insurance fund that prevents deleveraging.
Undercollateralized Account:
+2.1 Position (BTC)
-200 Margin (USDC)
Liquidator Account:
+0 Position (BTC)
+1000 Margin (USDC)
Oracle Prices:
BTC Oracle Price: 100 USDC per BTC
Fully liquidating the undercollateralized account would allow the account to be fully taken over by the Liquidator. Since the "value" of the account was 2.1 BTC * (100 USDC/BTC) - 200 USDC = 10 USDC, 20% of that profit then goes to the insurance pool. After the liquidation the account balances would be:
Liquidated Account:
+0 Position (BTC)
+0 Margin (USDC)
Liquidator Account:
+2.1 Position (BTC)
+798 Margin (USDC)
Insurance Fund:
+2 Margin (USDC)
Configuration
Environment Variables
| ENV Variable | Description |
|---|---|
| WALLET_ADDRESS | REQUIRED Ethereum address of the dYdX account owner that will do the liquidations |
| WALLET_PRIVATE_KEY | REQUIRED Ethereum private key the dYdX account owner that will do the liquidations. Make sure that "0x" is at the start of it (MetaMask exports private keys without it). |
| NETWORK_ID | Ethereum Network ID |
| ETHEREUM_NODE_URL | REQUIRED The URL of the Ethereum node to use (e.g. an infura url) |
| LIQUIDATION_KEY_EXPIRATION_SEC | Amount of time in seconds to wait before trying to liquidate the same account again |
| GAS_STATION_URL | URL of the gas station API to use |
| GAS_PRICE_MULTIPLIER | How much to multiply the fast gas price by when sending transactions |
| GAS_PRICE_UPDATE_FREQUENCY_SEC | How frequently to update the gas price |
| SOLO_LIQUIDATIONS_ENABLED | true or false - whether to liquidate solo accounts (true by default) |
| SOLO_EXPIRATIONS_ENABLED | true or false - whether to liquidate expired accounts (false by default) |
| SOLO_COLLATERAL_PREFERENCES | List of preferences for which collateral markets to receive first when liquidating |
| SOLO_OWED_PREFERENCES | List of preferences for which markets to liquidate first on an account when liquidating |
| SOLO_ACCOUNT_NUMBER | The dYdX account number to use for the liquidating account. If you're not sure what this is, use 0. This will show up on trade.dydx.exchange/account if you connect with the same wallet. |
| SOLO_MIN_ACCOUNT_COLLATERALIZATION | The desired minimum collateralization of the liquidator account after completing a liquidation. Prevents the liquidator account from being at risk of being liquidated itself if the price of assets continues to move in some direction. Higher values are safer. e.g. 0.5 = 150% collateralization |
| SOLO_MIN_OVERHEAD_VALUE | If you can liquidate less than this amount of value before hitting SOLO_MIN_ACCOUNT_COLLATERALIZATION, then don't liquidate. (1 USD = 1e36) |
| SOLO_EXPIRED_ACCOUNT_DELAY_SECONDS | How long to wait before liquidating expired accounts. The spread for liquidating expired accounts ramps up linearly from 0% to 5% over 1 hour. |
| PERP_LIQUIDATIONS_ENABLED | true or false - whether to liquidate perpetual accounts (false by default) |
| PERP_MIN_ACCOUNT_COLLATERALIZATION | The desired minimum collateralization of the liquidator account after completing a perpetual liquidation. Higher values are safer. e.g. 0.5 = 150% collateralization |
| ACCOUNT_POLL_INTERVAL_MS | How frequently to poll for liquidatable accounts |
| MARKET_POLL_INTERVAL_MS | How frequently to poll for market updates |