Liquidations & Redistribution
When a Safe's collateral ratio drops below 125%, anyone can liquidate it. The caller receives 2% of the collateral as compensation. The remaining 98% of collateral and 100% of debt are redistributed proportionally to all active borrowers of the same collateral type, based on their collateral weight.
Redistributions are applied lazily. Your Safe absorbs its share the next time you interact with it (deposit, withdraw, borrow, repay, or close), or when anyone calls refreshSafe on your behalf. Both your collateral and debt will increase, and your collateral ratio will decrease. If a liquidation happens late, the absorbed debt may exceed the collateral gained. Pending redistributions are always included in CR checks, so your Safe can become liquidatable from accumulated redistribution debt even before refreshing.