The Maker protocol – Liquidations 2.0 smart contracts have been audited by ChainSecurity.
Liquidations 2.0 for multi collateral DAI has been developed to mitigate uncovered shortcomings in the previous liquidation system. The most notable change from the previous version is the move from English to Dutch style auctions. The resulting single block composability allows anyone to participate in the liquidation without capital constraints by leveraging flash-loans. Contrary to the old system, partial liquidations no longer exists except under special circumstances. Keepers, responsible to initiate the liquidation of undercollateralized vaults have no first mover advantage anymore in the auction, hence a new incentive scheme has been introduced.
ChainSecurity uncovered 4 medium severity and 6 low severity findings, all of which have been addressed by Maker.