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How Is the Collateralization Ratio Monitored in Real-Time?

Smart contracts continuously check the market price of the collateral via decentralized oracles and compare it to the stablecoin debt value.
Greeks.Live22.11.25

How Is the Collateralization Ratio Monitored in Real-Time?

In decentralized, over-collateralized stablecoin protocols, the collateralization ratio is monitored in real-time by smart contracts. The smart contract continuously checks the current market price of the volatile collateral (via decentralized oracles) and compares it to the value of the stablecoin debt.

This allows the protocol to instantly identify when a position is approaching the liquidation threshold and trigger the liquidation mechanism autonomously, without human intervention.

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