Speaking about innovation in liquidations, Fluid implements a highly efficient liquidation mechanism that prevents individual position liquidations by consolidating them into groups, significantly reducing the risk of bad debts in volatile market conditions.

And these are not my words, it is a quote from @MixBytes research article.

In other lending markets, every position is isolated from each other, meaning that the liquidator has to come and liquidate n-positions separately. In the times when markets are very volatile, gas prices are high, and bots are competing against each other to liquidate the biggest positions, smaller positions might not get liquidated at all because the cost of liquidation is eventually higher than the penalty resulting in a bad debt.

On Fluid, all positions (of the same collateral) are bundled together, so a liquidator is liquidating one huge pool of liquidity in a single transaction without liquidating $1 and $1m positions separately, but instead he will liquidate $1,000,001 at a time (or only a part if he wants so) securing the protocol from any potential bad debt.

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