Borrower Guide

Learn how to set up and manage preliquidation parameters as a borrower

Key Benefits

Choose the integration approach that best fits your needs

Integration Methods

Include the PreLiquidationFactory interface in your smart contract project. This interface defines the methods needed to interact with the factory contract.

Ready-to-use implementation examples for different deployment methods

Code Samples

Smart Contract Integration

PreLiquidation.sol PreLiquidationFactory.sol

PreLiquidationDeployer.sol

// SPDX-License-Identifier: MIT
    pragma solidity ^0.8.0;

    import "@morpho/preliquidation/interfaces/IPreLiquidationFactory.sol";
    import "@morpho/preliquidation/interfaces/IPreLiquidation.sol";

    contract PreLiquidationDeployer {
        // Factory contract address
        address public immutable factory;
        
        constructor(address _factory) {
            factory = _factory;
        }
        
        /**
         * @notice Deploy a new PreLiquidation contract with custom parameters
         * @param _morphoMarketId The Morpho market ID
         * @param _preLltv The pre-liquidation LTV threshold
         * @param _preLCF1 Close factor 1 for partial liquidation
         * @param _preLCF2 Close factor 2 for health-based liquidation
         * @param _preLIF1 Liquidation incentive factor 1
         */
        function deployPreLiquidation(
            bytes32 _morphoMarketId,
            uint256 _preLltv,
            uint256 _preLCF1,
            uint256 _preLCF2,
            uint256 _preLIF1
        ) external returns (address preLiquidation) {
            // Deploy through factory
            preLiquidation = IPreLiquidationFactory(factory).createPreLiquidation(
                _morphoMarketId,
                _preLltv,
                _preLCF1,
                _preLCF2,
                _preLIF1
            );
            
            // Log deployment
            emit PreLiquidationDeployed(preLiquidation, _morphoMarketId);
        }
        
        /**
         * @notice Authorize a deployed contract to manage positions on Morpho
         * @param _preLiquidation Address of the deployed PreLiquidation contract
         */
        function authorizePreLiquidation(address _preLiquidation) external {
            // Authorize the contract to manage your positions
            IPreLiquidation(_preLiquidation).authorizeOnMorpho();
        }
    }
// SPDX-License-Identifier: MIT
    pragma solidity ^0.8.0;

    import "@morpho/preliquidation/interfaces/IPreLiquidationFactory.sol";
    import "@morpho/preliquidation/interfaces/IPreLiquidation.sol";

    contract PreLiquidationDeployer {
        // Factory contract address
        address public immutable factory;
        
        constructor(address _factory) {
            factory = _factory;
        }
        
        /**
         * @notice Deploy a new PreLiquidation contract with custom parameters
         * @param _morphoMarketId The Morpho market ID
         * @param _preLltv The pre-liquidation LTV threshold
         * @param _preLCF1 Close factor 1 for partial liquidation
         * @param _preLCF2 Close factor 2 for health-based liquidation
         * @param _preLIF1 Liquidation incentive factor 1
         */
        function deployPreLiquidation(
            bytes32 _morphoMarketId,
            uint256 _preLltv,
            uint256 _preLCF1,
            uint256 _preLCF2,
            uint256 _preLIF1
        ) external returns (address preLiquidation) {
            // Deploy through factory
            preLiquidation = IPreLiquidationFactory(factory).createPreLiquidation(
                _morphoMarketId,
                _preLltv,
                _preLCF1,
                _preLCF2,
                _preLIF1
            );
            
            // Log deployment
            emit PreLiquidationDeployed(preLiquidation, _morphoMarketId);
        }
        
        /**
         * @notice Authorize a deployed contract to manage positions on Morpho
         * @param _preLiquidation Address of the deployed PreLiquidation contract
         */
        function authorizePreLiquidation(address _preLiquidation) external {
            // Authorize the contract to manage your positions
            IPreLiquidation(_preLiquidation).authorizeOnMorpho();
        }
    }

SDK Integration

@morpho-org/blue-sdk @morpho-org/morpho-ts

deployPreliquidation.ts

import { MarketParams } from "@morpho-org/blue-sdk";

const config = new MarketParams({
    loanToken: "0xC02aaA39b223FE8D0A0e5C4F27eAD9083C756Cc2", // WETH
    collateralToken: "0x7f39C581F595B53c5cb19bD0b3f8dA6c935E2Ca0", // wstETH
    oracle: "0x2a01EB9496094dA03c4E364Def50f5aD1280AD72",
    irm: "0x870aC11D48B15DB9a138Cf899d20F13F79Ba00BC", // AdaptiveCurveIrm
    lltv: 94_5000000000000000n, // 94.5%
});

config.liquidationIncentiveFactor; // e.g. 1_090000000000000000n (109%).
        import { MarketParams } from "@morpho-org/blue-sdk";

const config = new MarketParams({
    loanToken: "0xC02aaA39b223FE8D0A0e5C4F27eAD9083C756Cc2", // WETH
    collateralToken: "0x7f39C581F595B53c5cb19bD0b3f8dA6c935E2Ca0", // wstETH
    oracle: "0x2a01EB9496094dA03c4E364Def50f5aD1280AD72",
    irm: "0x870aC11D48B15DB9a138Cf899d20F13F79Ba00BC", // AdaptiveCurveIrm
    lltv: 94_5000000000000000n, // 94.5%
});

config.liquidationIncentiveFactor; // e.g. 1_090000000000000000n (109%).

Understanding the key parameters for PreLiquidation contracts

Parameter Explanation

Concepts

Integrators

Borrower Guide

Table of Contents

Key Benefits

Predictable Contract Address

Fee Explanation

Monitoring Position

Borrower Guide

Table of Contents

Key Benefits

Predictable Contract AddressUse PreLiquidationAddressLib to determine your contract address before deployment

Predictable Contract Address

Fee ExplanationUnderstanding the fees associated with pre-liquidation

Fee Explanation

Monitoring PositionHow to track the active pre-liquidation parameters for your position

Monitoring Position

Import Factory Interface

Connect to Network

Prepare Morpho Market ID

Prepare PreLiquidationParams

Call createPreLiquidation

Handle Transaction Response

Verify Deployment

Store Contract Address