Problem
Liquidation profits are real, but access is not
Across DeFi lending markets, liquidations create a consistent stream of profit for those who can execute them correctly. The issue is that most users cannot access these profits, even if they understand the opportunity.
Liquidations are not a “normal trade.” They are an infrastructure game.
Why most people can’t capture liquidation yield
1) It’s operationally complex
To capture liquidation profit, you need:
Real-time monitoring of positions and health factors
Correct liquidation sizing and routing
Fast execution and reliable infrastructure
Constant maintenance when markets change
Most individuals do not have the time, tooling, or experience to run this professionally.
2) It’s speed and reliability constrained
Liquidations are competitive:
Opportunities are time-sensitive
Multiple bots race the same position
Execution quality matters as much as strategy
Without robust systems, you either miss the liquidation or execute poorly (slippage, stale oracles, failed transactions).
3) It’s risk-heavy if you get it wrong
If the system is poorly designed, a liquidation attempt can result in:
Failed transactions and wasted fees
Adverse pricing due to slippage
Unexpected exposure during volatile moves
Capital being stuck or mismanaged during stress events
In short: it’s not “set and forget” unless the infrastructure is built for it.
4) Traditional access paths don’t help
Most users are left with two suboptimal options:
Manually trade liquidations (not realistic at scale)
Hand capital to third parties (custodial risk, opaque execution, misaligned incentives)
Neither is a clean fit for users who want transparent, automated, non-custodial exposure.
The core gap in the market
There is no simple, safe way for everyday participants to earn from liquidation activity without:
Running their own bot stack, or
Trusting an external operator with full custody and discretion
Liquidation yield exists, but access is gated by infrastructure.
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