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HomeCompound liquidation incentive

Compound liquidation incentive

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Liquidation Bonus vs Penalty in DeFi: Who Pays?

August 24, 2026 CryptoExpert

Liquidation bonus and liquidation penalty name two opposite ways DeFi protocols pay for the work of liquidating risky loans. In a bonus model, the liquidator receives extra collateral as a reward for repaying debt. In […]

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