How do I set the liquidation-only mode for TRON (TRX) contracts?

Understanding Liquidation-Only Mode in TRON Contracts

Liquidation-only mode is a risk management feature available on certain decentralized exchanges and lending platforms that support TRON-based smart contracts. When activated, this mode restricts a user’s position to only allow actions that reduce exposure, such as repayments or partial closures, while disabling any further borrowing or leverage increases. It acts as a protective mechanism when a user's collateral ratio approaches dangerous levels.

1. This mode prevents additional debt accumulation during periods of high volatility.

2. It ensures that the system prioritizes stability by allowing only deleveraging operations.

3. Users remain responsible for monitoring their positions even after enabling this state.

4. The trigger for activation can be automatic based on health factor thresholds defined by the protocol.

5. Once entered, exiting liquidation-only mode typically requires improving the collateral-to-debt ratio beyond a safe threshold.

Steps to Activate Liquidation-Only Mode on TRX-Based Platforms

Several DeFi protocols built on the TRON network, such as JustLend or Sun.io, implement mechanisms similar to liquidation-only states. While direct toggling might not always be user-initiated, understanding how to influence this setting is crucial for managing at-risk positions.

1. Access your account dashboard on the platform hosting the TRX contract.

2. Navigate to the “Borrow & Collateral” section where your active loans are displayed.

3. Check the current health factor; if it falls below 1.1x, some systems auto-enable restrictions.

4. Deposit additional TRX or other accepted collateral types to improve margin safety.

5. Repay a portion of outstanding stablecoin debt to reset eligibility for full functionality.

Role of Smart Contract Logic in Enforcing Restrictions

The behavior of liquidation-only mode is hardcoded into the logic of TRC-20 compliant lending contracts. These rules govern under what conditions users can interact with their leveraged positions. Developers deploy these parameters to minimize systemic risk across the ecosystem.

1. Function modifiers within the contract verify the account’s health before executing trades or borrows.

2. External price oracles feed real-time TRX valuations into the contract to assess collateral sufficiency.

3. If the liquidation threshold is breached, specific functions like borrow() or mint() revert transactions.

4. Only functions reducing debt exposure—such as repay() or withdrawCollateral()—are permitted.

5. Events emitted by the contract notify off-chain monitoring tools about status changes.

Frequently Asked Questions

What happens if my TRX position enters liquidation-only mode?When your position triggers this mode, you lose the ability to borrow more or increase leverage. You may still repay debt or deposit more collateral. Failure to act could lead to partial or full liquidation by external keepers.

Can I manually enable liquidation-only mode for safety?Most platforms do not offer manual activation. The mode is automatically enforced by the smart contract when predefined risk thresholds are met. However, you can simulate its effect by voluntarily halting new borrows and focusing on repayment.

Does liquidation-only mode guarantee protection from liquidation?No. It serves as a warning and restriction layer but does not prevent liquidation if the collateral value continues to drop. Timely intervention through top-ups or repayments is still required.

Which TRON-based dApps enforce this mode most strictly?Protocols like JustLend DAO and Sun.io apply stringent automated checks. Their contracts frequently audit account health using integrated Band Protocol or Chainlink oracles to determine access rights dynamically.