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Glossary · S
Soft Liquidation
A gradual liquidation mechanism introduced by Curve's crvUSD lending system (LLAMMA). Instead of a sharp all-or-nothing liquidation when a position falls below a threshold, soft liquidation converts collateral incrementally to the borrowed stablecoin as prices fall through a liquidation range, and re-converts back if prices recover. This reduces the brutal 'cliff edge' liquidation experience of traditional DeFi lending.
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