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 the following key functionalities:

• 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 — 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