Every loan on this chain, and how far it has left to fall.
Morpho Blue lends dollars against tokenized stocks here. A loan is safe until its collateral falls far enough — and then anyone at all may repay part of that debt and take collateral worth up to 15% more than they paid for it. Scarp is the instrument for watching it.
Closest to the edge
Three things happen, one transaction
Scarp deploys no contract. A strike is one call to Morpho Blue's own
liquidate(), sent from your wallet.
A loan crosses its line
Every position is a pile of collateral and a debt against it. Morpho allows the debt up to a fixed share of what the collateral is worth. Past that, it is open to anyone — and interest never stops, so a loan can cross on a perfectly still day.
You size the strike
You name how many dollars you are willing to commit. Scarp finds the largest repayment that fits inside them, prices the collateral it would seize, and prices the sale of those shares through the real pools — so the bounty shown is what is left afterwards.
Morpho pays the premium
You repay the debt and receive collateral worth more than it cost. The premium is not auctioned or negotiated: it is a fixed function of how conservative the market is, and Morpho refuses the whole transaction if the position is not genuinely past its limit.
Three ways a bounty can be a mirage
A number that looks like profit and is not is worse than no number at all.
The debt is dust
Morpho rounds a debt up to the wei, so a position repaid to nothing can sit at exactly 100% of its limit owing a fraction of a cent. The first scan of this chain reported four positions "liquidatable right now" — every one of them owed $0.00.
The oracle is lying
An oracle is a contract anyone may deploy. The largest market this chain's directory returns has $100m borrowed against a counterfeit dollar, with an oracle answering 1e18 a share.
The shares cannot be sold
A strike is paid its premium in collateral, and on this chain those shares go back into pools that are shallow and many. A 12.68% premium collected by pushing $83,000 through one thin pool is not 12.68%.
Measured against the chain, not asserted
The arithmetic is a port of Morpho's own libraries, checked by liquidating a real position on a fork of this chain — with the market's oracle replaced so the position actually goes under — and requiring every number to match to the wei.
The board reads without a wallet
You need one only to strike.