Overview

Executive Summary

The Asynchronous Liquidation Auction (ALA) is an innovative solution designed to address inefficiencies in the liquidation processes within Decentralized Finance (DeFi) protocols. Originating from Canza Finance’s vision, ALA aims to optimize how collateral liquidations occur by providing a more inclusive, flexible, and efficient mechanism that eliminates the reliance on bot-driven liquidations. This method allows liquidity on standby to facilitate liquidation events while reducing network congestion and encouraging free-market price discovery.

ALA's unique structure enables a fairer distribution of liquidation opportunities among participants by sequentially processing bids based on their risk tolerance and available capital. This ensures that the liquidation process remains transparent and accessible, creating a more stable and resilient liquidation process for DeFi ecosystems. The ALA mechanism further integrates cross-chain liquidity, enabling the leveraging of liquidity from various blockchains to improve efficiency and liquidity depth.

This white paper details ALA's origins, mechanism, benefits, and implementation roadmap. It aims to position ALA as a global solution that is highly relevant to institutions and retail investors.

Introduction

The Asynchronous Liquidation Auction (ALA). (ALA) is a solution tailored to optimize the liquidation processes in DeFi by providing standby liquidity and minimizing the need for bot-run liquidations? This approach not only alleviates network congestion but also enhances price discovery for liquidation penalties, thus reducing the risk of liquidation cascades.