Definition ∞ Liquidation bypass refers to a method that allows a borrower in a decentralized lending protocol to avoid automatic liquidation of their collateralized position. This circumvention can occur due to flash loan attacks or oracle manipulation. Such a bypass undermines the stability mechanisms of lending platforms. It represents a critical security failure in DeFi.
Context ∞ Liquidation bypass events are a serious concern in decentralized finance, frequently appearing in reports detailing exploits. Discussions often focus on strengthening oracle security and improving protocol resilience against flash loan attacks. Preventing liquidation bypasses is paramount for maintaining the solvency and trustworthiness of DeFi lending markets.
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