Master accounts are responsible of storing the margining information of the associated sub accounts. When the composite c-ratio across cross margined sub accounts or the individual c-ratio if an isolated margined sub account falls below 110%, the position(s) in the sub accounts become open for liquidation.
Liquidators are incentivized to step in and pay off the liabilities owed by the sub account(s) until the users c-ratio is back above 120%. Liquidators receive a liquidation fee of 5% (in the form of a discount on the collateral they provide) for maintaining the solvency of the protocol.
Because of the speed and low cost of Solana, and as implied above, liquidations can be partial. Falling below a maintenance margin level does not necessarily lead to full liquidation of a position, as it does on some blockchains and protocols.
In the calculation of an users C-Ratio for their positions, the max of two TWAP's (Time Weighted Average Price) is taken of the Pyth oracle price:
To calculate the value of an user's collateral, Cypher uses the Pyth supplied EMA (Exponential Moving Average):
Where in this case: