SuiDollar
  • SuiDollar Overview
  • Delta Neutral USDC Vault
    • Vault Strategy
    • Deposits and Withdrawals
    • Protocol Fees and Reserves
    • Risks
      • Funding Risk
      • Liquidation Risk
      • Collateral Risk
      • Smart Contract Risk
  • Resources
    • Important Links
Powered by GitBook
On this page
  1. Delta Neutral USDC Vault
  2. Risks

Liquidation Risk

The Vault strategy requires 2 onchain debt positions:

  • USDC is borrowed against SUI collateral on NAVI.

  • An equivalent SUI-PERP short position is opened on Bluefin, thereby hedging the SUI delta.

The Vault is designed to maintain these positions through time, shifting collateral between NAVI and Bluefin as the SUI price changes.

Liquidation Risk refers to the event that the Vault fails to rebalance collateral timeously, leading to the liquidation of one or both of the debt positions above. In the event of liquidation, the Vault could suffer a significant loss, and Vault assets may become exposed to changes in the price of SUI for a period of time.

PreviousFunding RiskNextCollateral Risk

Last updated 6 months ago