Liquidation

The liquidation process mandates the use of an Oracle to provide requisite price information. Optimex Borrows utilizes the price oracle supplied by Chainlink. The Settlement Committee depends on this price oracle to accurately determine when to initiate a liquidation event.

The liquidation process, which fundamentally involves selling the collateralized BTC for USDC to repay any outstanding USDC debt on the Morpho Market, is executed via Optimex Swap. The following details concerning this process are noteworthy:

• The Settlement Committee, rather than the BTC owner, serves as the initiator of the swap transaction for liquidation purposes.

• Given that the Borrower is required to pre-sign the transaction for potential liquidation at the outset, it is logical to expend the entire collateral amount.

• After the repayment of all outstanding debt on the Morpho Market, any resulting collateral surplus which the borrower is entitled to will be denominated in USDC.