Olive relies on Chainlink price oracles to obtain up-to-date crypto asset prices. These prices play a crucial role in determining the health factor of a position.
If user's health factor drops below 1, liquidation bots can trigger liquidation of the user's position and repay the debt.
Protocols like Arbitrum utilise optimistic rollups, a mechanism where execution is shifted from the primary layer (L1) of the Ethereum chain to a secondary layer (L2). After processing on L2, the results are then relayed back to L1.
Olive actively monitors the status of the L2 sequencer. If the sequencer becomes inactive, Olive temporarily halts all price checks within the protocol. This action suspends operations related to leverage and health factors. Normal operations resume once the sequencer is active again, with a wait period of one hour.