Low liquidation cost
In most of lending protocols, the prevalent liquidation mechanism allows a liquidator to repay a fraction of the borrower’s debt and acquire its collateral at a discount.
In LendBook, when the price crosses a limit price, the closing of a borrowing position does not rely on the active monitoring of liquidators but on that of takers. Takers, by taking the non-borrowed part of the assets, initiate the internal transfer from the borrowers to the lenders.
Since lenders agree to receive the collateral as a payment, the protocol does not need to incentivize bots to liquidate unhealthy positions on time. The borrower only pays small liquidation fee rate, with the goal to compensate lenders for receiving the collateral and give borrowers incentives to repay their loan before liquidation.