> For the complete documentation index, see [llms.txt](https://calnix.gitbook.io/aave-book/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://calnix.gitbook.io/aave-book/functions/liquidate/calculateavailablecollateraltoliquidate.md).
# calculateAvailableCollateralToLiquidate
## Overview
### Execution flow
* [x] cache + updateState + get health factor
* [x] \_calculateDebt
* [x] validateLiquidationCall
* [x] getConfigurationData
* [ ] calculateAvailableCollateralToLiquidate
* [ ] setBorrowing
* [ ] setUsingAsCollateral
* [ ] \_burnDebtTokens
* [ ] updateInterestRates
* [ ] updateIsolatedDebtIfIsolated
* [ ] liquidate/burn collateral
* [ ] liquidation fee
* [ ] Wrap-up
## \_calculateAvailableCollateralToLiquidate
Calculates how much of a specific collateral can be liquidated, given a certain amount of debt asset.
* `actualDebtToLiquidate` is passed as the value for parameter`debtToCover`
* `actualDebtToLiquidate` => user's debt \* close factor
* `actualDebtToLiquidate` was obtained in \_calculateDebt
**Returns:**
* `collateralAmount` to be liquidated (`baseCollateral` + liq. bonus)
* `debtAmountNeeded` (`baseCollateral` valued in debt asset)
{% hint style="info" %}
Liquidator repays debt and take equivalent value in collateral from user. However, user must additionally pay a haircut to the liquidator as a penalty.
{% endhint %}
### 1. Get prices of both collateral and debt assets
### 2. Define 1 unit of each asset
Define what 1 unit of each asset is
* 1 unit of ETH => 1e18
* 1 unit of USDC => 1e6
Obtain decimals; see [getDecimals](/aave-book/functions/common-functions/getreservefactor-getdecimals.md).
### 3. Get liquidation fee
When liquidating, the protocol may apply a liquidation fee that goes to the protocol's treasury.
* `getLiquidationProtocolFee` applies a bitmask and bitwise operations similar to getFlags or getDecimals.
* See Common functions section or the Bitmap function to understand.
### 4. Calculate amount of collateral to liquidate (+ liq. bonus)
By now we have established how much debt the liquidator will **repay**: `actualDebtToLiquidate`
We then need to value the debt in collateral terms. This is expressed as `baseCollateral`.
{% hint style="info" %}
Liquidator repays debt to protocol, and takes the equivalent value in the form of collateral asset, from the user. (ignoring liq. bonus)
{% endhint %}
**Let's reorder the operations so it is clearer:**
```solidity
// value debt in USD
(debtToCover/debtAssetUnit * debtPrice) = debt[USD]
// how many units of collateral
debt[USD] / collateralPrice = debt in units of collateral, collateralAmtUnits
// express units of collateral in full decimals
collateralAmtUnits * collateralAssetUnit = collateral "in wei"
// baseCollateral == collateral "in wei"
```
Please note the "in wei" is simply meant to indicate that the collateral is now expressed in the full precision of its native decimals; this could be 6 for USDC or 18 for Ether. "in wei" is subjective.
`baseCollateral` is the equivalent amount of collateral for the specified debt to be repaid. Now we need to apply the liquidation bonus on it.
```solidity
// liqudiationBonus expressed as 1.XX
maxCollateralToLiquidate = baseCollateral * liquidationBonus
```
The `liquidationBonus` is expressed as a percentage **1.XX:**
* for Ether, it is `10500`
* Percentages in Aave are defined with 2 decimals of precision (100.00).
* 1e4 => 100.00%
* Therefore, `10500` => `105.00` => `1.05`
Hence, instead of obtained the `liquidationBonus` and subsequently adding it to the `baseCollateral`, in two steps, we can do so in 1 step.
{% hint style="info" %}
Borrowers on liquidation lose the equivalent amount of collateral to the debt that was repaid to make them healthy AND suffer a haircut on top of that amount, known as the liquidation penalty.
Liquidation penalty is the liquidation bonus given as incentive to liquidators.
{% endhint %}
### 5. Does the user have sufficient collateral?
With finding `maxCollateralToLiquidate` we have established how much collateral the user must give up in this process. Does he have enough?
If `maxCollateralToLiquidate > userCollateralBalance` :
* user has insufficient collateral as per what the liquidator is willing to repay
* calculate the debt repay amount based on user's available collateral
* this will be the new debt repay amount, overriding what the liquidator initially supplied
### 6. Liquidation Protocol Fee
Earlier in step 3 we obtained the liquidation protocol fee. Now we apply it.
```solidity
// get baseCollateral
collateralAmt / liquidationBonus = (baseCollateral + liq. bonus) / 1.05 = baseCollateral
//calculate liquidation bonus
bonusCollateral = collateralAmt - (baseCollateral)
bonusCollateral = liq. bonus
// apply fee
liquidationProtocolFee = bonusCollateral * liquidationProtocolFeePercentage
```
The liquidation protocol fee is applied upon the liquidation bonus. Effectively, liquidators pay a small percentage of their bonus to the protocol's treasury.
{% hint style="info" %}
The liquidation protocol fee is expressed as percentage. For Ether on mainnet, it is `1000`
* `1000` -> `10.00%`
* `liquidators pay 10% of their bonus to treasury`
{% endhint %}
{% hint style="success" %}
**User**
* pays liquidator liquidation bonus
* loses collateral equivalent to the debt that was repaid by liquidator
* **collateral lost = (repay + liq. bonus)**
**Liquidator**
* gains liquidation bonus from user
* pays liquidation protocol fee
* **profit = (liquidation bonus - protocol fee - gas)**
{% endhint %}
## \_calculateAvailableCollateralToLiquidate
Calculates how much of a specific collateral can be liquidated, given a certain amount of debt asset.
