What Is the Role of a Liquidator in a Lending Protocol and How Do They Benefit from Price Manipulation?

A liquidator is an external actor (often a bot) that repays a portion of an under-collateralized loan on behalf of the borrower and, in return, receives the borrower's collateral at a discount (the liquidation penalty). In an oracle attack, the attacker profits, but the liquidator may also benefit by liquidating the attacker's artificially under-collateralized position once the price reverts, assuming the protocol is not completely drained.