On March 11, according to the official blog, Synthetix, a synthetic asset protocol, announced that it will update the liquidation mechanism to incentivize stakers to consider global interests and cancel forced liquidation under extreme market conditions. The current liquidation mechanism of Synthetix is automatic liquidation when the mortgage rate of the staker is lower than the value required by the system, but panic caused a chain reaction in several extreme market conditions last year.
The updated new liquidation mechanism will give users 24 hours to increase the mortgage rate when the user’s mortgage rate is less than 200%. If the user does not perform self-liquidation, the liquidator will perform the liquidation, and the user will bear a penalty of 30% of the amount of mortgaged SNX. If users liquidate themselves, they will bear a penalty of 20% of the amount of mortgaged SNX. If the user increases the mortgage rate to more than 200% within 24 hours, it will not be liquidated.