The Asynchronous Liquidation Auction (ALA)

A Decentralized Mechanism for Optimized Collateral Liquidation

Canza Foundation

DRAFT Version 0.1

Abstracts

The Asynchronous Liquidation Auction (ALA) introduces a transformative approach to decentralized finance (DeFi) by addressing inefficiencies in traditional collateral liquidation processes. Developed by Canza Finance, ALA eliminates reliance on bot-driven liquidations, alleviates network congestion, and fosters free-market price discovery. The mechanism ensures fairness by sequentially processing bids based on risk tolerance and capital availability, democratizing access to liquidation events.

Key features include cross-chain liquidity integration, enabling seamless asset flow across blockchains, and a transparent, auditable auction process that enhances ecosystem resilience. ALA’s innovative structure optimizes liquidation efficiency and reduces the risks of cascading liquidations, offering robust risk management for DeFi protocols.

Designed for retail and institutional participants, ALA represents a significant step forward in creating a stable, inclusive, and efficient DeFi ecosystem. This white paper outlines ALA's origins, mechanisms, and roadmap, positioning it as a cornerstone of future DeFi innovation.