liquidate_cdp
Liquidate an undercollateralized CDP through the stability pool — builds an unsigned transaction (CBOR hex) for client-side signing
This record as markdown: /tools/indigoprotocol-indigo-mcp/liquidate-cdp.md
What liquidate_cdp does on Indigo Protocol MCP
AI agents use liquidate_cdp to commit financial operations through Indigo Protocol MCP, usually the final step of a payment, billing, or trading workflow. A call moves real money.
| Parameter | Type | Required | Description |
|---|---|---|---|
asset | string | — | |
address | string | — | User Cardano bech32 address (addr1... or addr_test1...) |
cdpTxHash | string | — | Transaction hash of the CDP UTxO |
cdpOutputIndex | number | — | Output index of the CDP UTxO |
Parameters from the server's own tool schema.
Why liquidate_cdp is rated Critical
This tool triggers a liquidation of a Collateralized Debt Position (CDP) on a DeFi protocol, which is a financial operation that irreversibly destroys the CDP and redistributes collateral/debt through the stability pool. This constitutes a financial transaction with real monetary consequences — liquidating someone's position can cause permanent loss of collateral.
From the tool's definition Liquidate an undercollateralized CDP through the stability pool — builds an unsigned transaction (CBOR hex) for client-side signing
Attacks that exploit this kind of access
The rule that runs liquidate_cdp safely
PolicyLayer is an MCP gateway: it sits between your AI agents and Indigo Protocol MCP, and checks every tool call against a rule you set before the call runs. Nothing changes on the server itself. For liquidate_cdp, this is the rule to start with:
Any call to liquidate_cdp is blocked until a human approves it. The rest of the server keeps working.
The button opens the PolicyLayer dashboard: create your workspace, connect Indigo Protocol MCP, apply this rule, and every liquidate_cdp call is checked against it from then on.
Questions about liquidate_cdp
Liquidate an undercollateralized CDP through the stability pool — builds an unsigned transaction (CBOR hex) for client-side signing. It is categorised as a Financial tool in the Indigo Protocol MCP MCP Server, which means it involves financial transactions. Block by default and require explicit approval.
liquidate_cdp accepts 4 parameters: asset, address, cdpTxHash, cdpOutputIndex. The full parameter table on this page comes from the server's own tool schema.
Register the Indigo Protocol MCP server in PolicyLayer and add a rule for liquidate_cdp: allow, deny, rate-limit, or require approval. Point your MCP client at the PolicyLayer proxy URL and the rule is enforced on every call, before it reaches Indigo Protocol MCP. Nothing to install.
liquidate_cdp is a Financial tool with critical risk. Critical-risk tools should be blocked by default and only enabled with explicit human approval.
Yes. Add a rate_limit block to the liquidate_cdp rule in your PolicyLayer policy. For example, setting max: 10 and window: 60 limits the tool to 10 calls per minute. Rate limits are tracked per agent session and reset automatically.
Set action: deny in the PolicyLayer policy for liquidate_cdp. The AI agent will receive a policy violation error and cannot call the tool. You can also include a reason field to explain why the tool is blocked.
liquidate_cdp is provided by the Indigo Protocol MCP server (indigoprotocol/indigo-mcp). PolicyLayer sits as a proxy in front of this server to enforce policies before tool calls reach the server.
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