PartyB Liquidations

The PartyB Liquidation Facet handles the decentralized liquidation of insolvent isolated-mode PartyBs. Liquidators with the PARTYB_LIQUIDATOR_ROLE detect insolvency off-chain and execute a two-step on-chain process: initiate the liquidation, then close positions. The underlying logic is implemented in the PartyBLiquidationFacetImpl library.

This facet handles isolated-mode PartyB liquidation only. Cross-mode PartyB liquidation is handled by the ClearingHouseFacet , since cross-mode liquidation affects all PartyAs simultaneously and requires centralized coordination.

In v0.8.5, the following key change applies:

• Dual LiquidatePositionsPartyB Event: liquidatePositionsPartyB now emits two versions of the event: the legacy one and a new one that includes averageClosedPrices, matching the pattern used in PartyA liquidation.

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Overview

The PartyB Liquidation Facet provides:

• Initiate PartyB Liquidation: Marks an isolated-mode PartyB as insolvent with respect to a specific PartyA, using a Muon uPnL signature.

• Liquidate PartyB Positions: Closes all open positions between the liquidated PartyB and the PartyA at oracle-provided prices.

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liquidatePartyB()

Initiates the liquidation of a PartyB with respect to a specific PartyA. The Muon SingleUpnlSig provides PartyB's uPnL, which the contract uses to verify insolvency. Once called, the PartyB is frozen for this PartyA relationship, and no trading operations are permitted.

Function Signature:

function liquidatePartyB(
    address partyB,
    address partyA,
    SingleUpnlSig memory upnlSig
) external whenNotLiquidationPaused notLiquidatedPartyB(partyB, partyA) notCrossLiquidatedPartyB(partyB) notLiquidatedPartyA(partyA) onlyRole(PARTYB_LIQUIDATOR_ROLE);

Parameters:

• partyB: The address of the PartyB to liquidate.

• partyA: The address of the PartyA related to this liquidation.

• upnlSig: The Muon signature containing PartyB's unrealized PnL for solvency verification.

Access: Requires PARTYB_LIQUIDATOR_ROLE. PartyB must not already be in liquidation (isolated or cross). PartyA must not be in liquidation.

Events Emitted:

• LiquidatePartyB(address liquidator, address partyB, address partyA, uint256 partyBAllocatedBalance, int256 upnl)

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liquidatePositionsPartyB()

Closes open positions of the liquidated PartyB for a given PartyA at oracle-provided prices. Can be called in batches. When all positions between the PartyB and PartyA are closed (position count reaches zero), a FullyLiquidatedPartyB event is emitted, completing the liquidation.

Function Signature:

function liquidatePositionsPartyB(
    address partyB,
    address partyA,
    QuotePriceSig memory priceSig
) external whenNotLiquidationPaused onlyRole(PARTYB_LIQUIDATOR_ROLE);

Parameters:

• partyB: The address of the PartyB whose positions are being liquidated.

• partyA: The address of the PartyA related to the liquidation.

• priceSig: The Muon signature containing quote IDs and their corresponding prices for liquidation.

Access: Requires PARTYB_LIQUIDATOR_ROLE.

Events Emitted:

• LiquidatePositionsPartyB(address liquidator, address partyB, address partyA, uint256[] quoteIds, uint256[] liquidatedAmounts, uint256[] closeIds) (legacy event)

• LiquidatePositionsPartyB(address liquidator, address partyB, address partyA, uint256[] quoteIds, uint256[] liquidatedAmounts, uint256[] closeIds, uint256[] averageClosedPrices) (new event with average closed prices)

• FullyLiquidatedPartyB(address partyB, address partyA), when all positions between the pair are closed