Second-Price Liquidations on Sui

Why liquidation value leaks into priority gas races — and how a second-price auction returns it

Liquidation bots on Sui can spend a few thousandths of a dollar on a transaction, or hundreds of dollars competing for the right to execute it. The code has not become thousands of times more expensive. The opportunity has.

That difference is worth examining because much of the value in a conventional DeFi liquidation is assigned before the liquidator does any work. A protocol announces a collateral discount. Whoever gets the transaction through first collects it. When the discount is large and the execution cost is small, bots have a reason to spend the difference on transaction priority.

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Categories: defi  Tags: sui  defi  liquidations  auctions  mechanism-design