dYdX Liquidator

Bot to automatically liquidate undercollateralized and expired dYdX accounts.

Usage

Docker

Requires a running docker engine.

docker run \
  -e LIQUIDATOR_ACCOUNT_OWNER=0x2c7536E3605D9C16a7a3D7b1898e529396a65c23 \
  -e LIQUIDATOR_ACCOUNT_OWNER_PRIVATE_KEY=0x4c0883a69102937d6231471b5dbb6204fe5129617082792ae468d01a3f362318 \
  -e ETHEREUM_NODE_URL=mainnet.infura.io/v3/YOUR_INFURA_KEY \
  dydxprotocol/liquidator

Overview

This service will automatically liquidate undercollateralized and expired Accounts on the dYdX Solo Protocol. Liquidations on dYdX happen internally between Accounts, so no actual ERC20 token movements occur.

In order to use this liquidator bot, you will need a funded dYdX Account. If you use the default of LIQUIDATOR_ACCOUNT_NUMBER=0, you can fund your dYdX 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.

Liquidation Mechanics

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

Configuration

Environment Variables

ENV Variable	Description
LIQUIDATOR_ACCOUNT_OWNER	REQUIRED Ethereum address of the dYdX account owner that will do the liquidations
LIQUIDATOR_ACCOUNT_OWNER_PRIVATE_KEY	REQUIRED Ethereum private key the dYdX account owner that will do the liquidations
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
LIQUIDATION_COLLATERAL_PREFERENCES	List of preferences for which collateral markets to receive first when liquidating
LIQUIDATION_OWED_PREFERENCES	List of preferences for which markets to liquidate first on an account when liquidating
LIQUIDATOR_ACCOUNT_NUMBER	The dYdX account number to use for the liquidating account (0 will show up on trade.dydx.exchange/account)
MIN_LIQUIDATOR_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
NETWORK_ID	Ethereum Network ID
ACCOUNT_POLL_INTERVAL_MS	How frequently to poll for liquidatable accounts
MARKET_POLL_INTERVAL_MS	How frequently to poll for market updates
ENABLE_EXPIRATIONS	true or false - whether to liquidate expired accounts (false by default)
EXPIRED_ACCOUNT_LIQUIDATION_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.
MIN_VALUE_LIQUIDATED	The minimum value in USD to liquidate (1 USD = 1e36)

michaeldim / liquidator