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fix: add dust threshold to soft liquidation check #1692

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fix: add dust threshold to soft liquidation check #1692

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fix: add dust threshold to soft liquidation check
0xAlunara Nov 23, 2025
04df88f
Update apps/main/src/llamalend/llama.utils.ts
0xAlunara Nov 24, 2025
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21 changes: 20 additions & 1 deletion apps/main/src/llamalend/llama.utils.ts
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Original file line number Diff line number Diff line change
Expand Up @@ -92,6 +92,25 @@ export const updateUserEventsApi = (
void updateEvents(wallet.account.address, networkId as Chain, address as Address, txHash as Hex)
}

/**
* It’s possible that when a user briefly enters and then exits soft liquidation,
* one or more bands may be left with a tiny amount of crvUSD (dust). There is a
* dust-sweeping bot that cleans this up, but there can be a delay before those
* remnants are collected.
*
* The current front-end check is rudimentary and can sometimes conclude that a
* user is still in soft liquidation even though their overall health is healthy,
* which is confusing.
*
* As a pragmatic, short-term mitigation to reduce false positives, we only mark
* loans as being in soft liquidation when the crvUSD balance of a band exceeds
* a small threshold. This prevents trivial dust amounts from triggering the UI.
*
* If somebody wants to tackle this properly, they can find the bot code here:
* https://github.com/curvefi/dust-cleaner-bot/blob/0795b2fa/app/services/controller.py#L90
*/
const SOFT_LIQUIDATION_DUST_THRESHOLD = 0.1

/**
* healthNotFull is needed here because:
* User full health can be > 0
Expand All @@ -113,7 +132,7 @@ export function getLiquidationStatus(
userStatus.colorKey = 'hard_liquidation'
userStatus.tooltip =
'Hard liquidation is like a usual liquidation, which can happen only if you experience significant losses in soft liquidation so that you get below 0 health.'
} else if (+userStateStablecoin > 0) {
} else if (+userStateStablecoin > SOFT_LIQUIDATION_DUST_THRESHOLD) {
userStatus.label = 'Soft liquidation'
userStatus.colorKey = 'soft_liquidation'
userStatus.tooltip =
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