computeLiquidationPrice()

function computeLiquidationPrice(
  price,
  collateralTokenAmount,
  creditedTokenAmount,
  liquidationCollateralFactorBasisPoints
): Price | undefined;

Computes the pair price at which a dynamic LOC’s position becomes liquidatable: the price at which the position’s current collateral factor (credited value ÷ collateral value) reaches the pair’s live liquidation threshold.

liquidationPrice = currentPrice × currentCollateralFactor ÷ liquidationCollateralFactor

As the collateral’s price falls, the position’s current collateral factor rises; the liquidation price is the price at which that ratio reaches the threshold.

Parameters

Parameter	Type	Description
price	Price	The current pair price (collateral in terms of credited token, i.e. X in 1 collateral = X credited).
collateralTokenAmount	bigint	The LOC’s collateral amount, in the collateral token’s smallest unit.
creditedTokenAmount	bigint	The LOC’s credited amount, in the credited token’s smallest unit.
liquidationCollateralFactorBasisPoints	bigint | undefined	The asset pair’s current liquidation threshold (CollateralFactor.collateralFactorBasisPoints).

Returns

Price | undefined

The liquidation price, or undefined when the liquidation factor is 0 or undefined.

Remarks

A 0/undefined liquidation factor is an invariant violation, not a supported protocol state: LetterOfCredit.sol refuses to store a pair whose liquidation factor does not exceed its creation factor, and refuses to create a dynamic LOC on a pair with no creation factor, so a live dynamic LOC’s pair never carries a 0 liquidation factor. Reaching this function with 0/undefined means the caller’s upstream state is stale or unreadable — this returns indeterminate rather than a number, and never divides by the missing threshold.