Many users fear being 'liquidated when the market fluctuates', and Morpho's intelligent liquidation protection system specifically addresses this issue by providing assets with a 'buffer cushion':
① Multi-dimensional assessment of risk, not just looking at price
The system not only uses 'collateral price' to judge risk but also calculates:
Market liquidity: If a certain asset suddenly has no buyers, even if the price drops, it will temporarily avoid liquidation to prevent 'irrational liquidation due to poor liquidity';
Market sentiment: For example, if the market crashes sharply but rebounds immediately, the system will recognize 'short-term panic', not triggering liquidation and preventing users from being 'caught by market fluctuations'.
② Raising thresholds and issuing warnings during anomalies, giving users time to react
In extreme market conditions (for example, ETH dropping 20% in 10 minutes), the system will temporarily raise the liquidation threshold (for example, increasing the health factor from 1.05 to 1.2), allowing users to hold on a bit longer even if their positions are close to the liquidation line;
At the same time, alerts will be sent through the APP and emails, reminding users to 'quickly add collateral or repay part of the loan', so they won't only find out after liquidation is complete.
③ Market recovery will automatically lift the protection, the process will be fully transparent
Once the market stabilizes, the protection mechanism will automatically turn off, and the liquidation function will not be locked indefinitely; users can see in the 'protection panel':
Is it currently in a protective state, and how much has the liquidation threshold been adjusted?
Historical trigger records (for example, when was the last protection, and why was it triggered), all operations are traceable on the chain, no fear of 'dark box operations'.
With this protection in place, users no longer need to 'watch the market until dawn fearing liquidation', providing maximum peace of mind.
