Torch Liquidation Bot

You're here because you want to run a liquidation keeper on Torch Market -- and you want to do it safely.

Every migrated token on Torch has a built-in lending market. Holders lock tokens as collateral and borrow SOL from the community treasury (up to 50% LTV, 2% weekly interest). When a loan's LTV crosses 65%, it becomes liquidatable. Anyone can liquidate it and collect a 10% bonus on the collateral value.

That's where this bot comes in.

It scans every migrated token's lending market, checks every borrower's loan position, and when it finds one that's underwater -- it liquidates it through your vault. The collateral tokens go to your vault ATA. The SOL cost comes from your vault. The agent wallet that signs the transaction holds nothing.

This is not a read-only scanner. This is a fully operational keeper that generates its own keypair, verifies vault linkage, and executes liquidation transactions autonomously in a continuous loop.

How It Works

┌─────────────────────────────────────────────────────────┐
│                  LIQUIDATION LOOP                         │
│                                                          │
│  1. Discover migrated tokens (getTokens)                 │
│  2. For each token, check lending state (getLendingInfo)  │
│  3. Skip tokens with no active loans                     │
│  4. Get token holders (getHolders)                       │
│  5. For each holder, check loan position (getLoanPosition)│
│  6. If health === 'liquidatable':                        │
│     → buildLiquidateTransaction(vault=creator)           │
│     → sign with agent keypair                            │
│     → submit and confirm                                 │
│  7. Sleep SCAN_INTERVAL_MS, repeat                       │
│                                                          │
│  All SOL comes from vault. All collateral goes to vault. │
│  Agent wallet holds nothing. Vault is the boundary.      │
└─────────────────────────────────────────────────────────┘

The Agent Keypair

The bot generates a fresh Keypair in-process on every startup. No private key file. No environment variable (unless you want to provide one). The keypair is disposable -- it signs transactions but holds nothing of value.

On first run, the bot checks if this keypair is linked to your vault. If not, it prints the exact SDK call you need to link it:

--- ACTION REQUIRED ---
agent wallet is NOT linked to the vault.
link it by running (from your authority wallet):

  buildLinkWalletTransaction(connection, {
    authority: "<your-authority-pubkey>",
    vault_creator: "<your-vault-creator>",
    wallet_to_link: "<agent-pubkey>"
  })

then restart the bot.
-----------------------

Link it from your authority wallet (hardware wallet, multisig, whatever you use). The agent never needs the authority's key. The authority never needs the agent's key. They share a vault, not keys.

The Vault

This is the same Torch Vault from the full Torch Market protocol. It holds all assets -- SOL and tokens. The agent is a disposable controller.

When the bot liquidates a position:

SOL cost comes from the vault (the liquidation payment to cover the borrower's debt)
Collateral tokens go to the vault's associated token account (ATA)
10% bonus means the collateral received is worth 10% more than the SOL spent

The human principal retains full control:

withdrawVault() — pull SOL at any time
withdrawTokens(mint) — pull collateral tokens at any time
unlinkWallet(agent) — revoke agent access instantly

If the agent keypair is compromised, the attacker gets dust and vault access that you revoke in one transaction.

Getting Started

1. Install

npm install torch-liquidation-bot@3.0.2

Or use the bundled source from ClawHub — the Torch SDK is included in lib/torchsdk/ and the bot source is in lib/kit/.

2. Create and Fund a Vault (Human Principal)

From your authority wallet:

import { Connection } from "@solana/web3.js";
import {
  buildCreateVaultTransaction,
  buildDepositVaultTransaction,
} from "./lib/torchsdk/index.js";

const connection = new Connection(process.env.SOLANA_RPC_URL);

// Create vault
const { transaction: createTx } = await buildCreateVaultTransaction(connection, {
  creator: authorityPubkey,
});
// sign and submit with authority wallet...

// Fund vault with SOL for liquidations
const { transaction: depositTx } = await buildDepositVaultTransaction(connection, {
  depositor: authorityPubkey,
  vault_creator: authorityPubkey,
  amount_sol: 5_000_000_000, // 5 SOL
});
// sign and submit with authority wallet...

3. Run the Bot

VAULT_CREATOR=<your-vault-creator-pubkey> SOLANA_RPC_URL=<rpc-url> npx torch-liquidation-bot

On first run, the bot prints the agent keypair and instructions to link it. Link it from your authority wallet, then restart.

4. Configuration

|----------|----------|---------|-------------|

| SOLANA_RPC_URL | Yes | -- | Solana RPC endpoint (HTTPS). Fallback: RPC_URL |

| VAULT_CREATOR | Yes | -- | Vault creator pubkey |

| SOLANA_PRIVATE_KEY | No | -- | Disposable controller keypair (base58 or JSON byte array). If omitted, generates fresh keypair on startup (recommended) |

| SCAN_INTERVAL_MS | No | 30000 | Milliseconds between scan cycles (min 5000) |

Architecture

packages/bot/src/
├── index.ts    — entry point: keypair generation, vault verification, scan loop
├── config.ts   — loadConfig(): validates SOLANA_RPC_URL, VAULT_CREATOR, SOLANA_PRIVATE_KEY, SCAN_INTERVAL_MS, LOG_LEVEL
├── types.ts    — BotConfig, LogLevel interfaces
└── utils.ts    — sol(), bpsToPercent(), createLogger()

The bot is ~190 lines of TypeScript. It does one thing: find underwater loans and liquidate them through the vault.

Dependencies

| Package | Version | Purpose |

|---------|---------|---------|

| @solana/web3.js | 1.98.4 | Solana RPC, keypair, transaction |

| torchsdk | 3.2.3 | Token queries, lending state, liquidation builder, vault queries |

Two runtime dependencies. Both pinned to exact versions. No ^ or ~ ranges.

Vault Safety Model

The same seven guarantees from the Torch Market vault apply here:

| Property | Guarantee |

|----------|-----------|

| Full custody | Vault holds all SOL and all collateral tokens. Agent wallet holds nothing. |

| Closed loop | Liquidation SOL comes from vault, collateral tokens go to vault. No leakage to agent. |

| Authority separation | Creator (immutable PDA seed) vs Authority (transferable admin) vs Controller (disposable signer). |

| One link per wallet | Agent can only belong to one vault. PDA uniqueness enforces this on-chain. |

| Permissionless deposits | Anyone can top up the vault. Hardware wallet deposits, agent liquidates. |

| Instant revocation | Authority can unlink the agent at any time. One transaction. |

| Authority-only withdrawals | Only the vault authority can withdraw SOL or tokens. The agent cannot extract value. |

The Closed Economic Loop for Liquidations

| Direction | Flow |

|-----------|------|

| SOL out | Vault → Borrower's treasury debt (covers the loan) |

| Tokens in | Borrower's collateral → Vault ATA (at 10% discount) |

| Net | Vault receives collateral worth 110% of SOL spent |

The bot is profitable by design — every successful liquidation returns more value than it costs. The profit accumulates in the vault. The authority withdraws when ready.

Lending Parameters

| Parameter | Value |

|-----------|-------|

| Max LTV | 50% |

| Liquidation Threshold | 65% |

| Interest Rate | 2% per epoch (~weekly) |

| Liquidation Bonus | 10% |

| Utilization Cap | 50% of treasury |

| Min Borrow | 0.1 SOL |

Collateral value is calculated from Raydium pool reserves. The 1% Token-2022 transfer fee applies on collateral deposits and withdrawals (~2% round-trip).

When Liquidations Happen

A loan becomes liquidatable when its LTV exceeds 65%. This happens when:

The token price drops (collateral value decreases relative to debt)
Interest accrues (debt grows at 2% per epoch)
A combination of both

The bot checks position.health === 'liquidatable' — the SDK calculates LTV from on-chain Raydium reserves and the loan's accrued debt.

SDK Functions Used

The bot uses a focused subset of the Torch SDK:

| Function | Purpose |

|----------|---------|

| getTokens(connection, { status: 'migrated' }) | Discover all tokens with active lending markets |

| getLendingInfo(connection, mint) | Check if a token has active loans |

| getHolders(connection, mint) | Get token holders (potential borrowers) |

| getLoanPosition(connection, mint, wallet) | Check a holder's loan health |

| getVault(connection, creator) | Verify vault exists on startup |

| getVaultForWallet(connection, wallet) | Verify agent is linked to vault |

| buildLiquidateTransaction(connection, params) | Build the liquidation transaction (vault-routed) |

| confirmTransaction(connection, sig, wallet) | Confirm transaction on-chain via RPC (verifies signer, checks Torch instructions) |

buildLiquidateTransaction Parameters

const { transaction, message } = await buildLiquidateTransaction(connection, {
  mint: token.mint,           // token with the underwater loan
  liquidator: agentPubkey,    // agent wallet (signer)
  borrower: holderAddress,    // borrower being liquidated
  vault: vaultCreator,        // vault creator pubkey (SOL from vault, tokens to vault)
});

Log Output

=== torch liquidation bot ===
agent wallet: 7xK9...
vault creator: 4yN2...
scan interval: 30000ms

[09:15:32] INFO  vault found — authority=8cpW...
[09:15:32] INFO  agent wallet linked to vault — starting scan loop
[09:15:32] INFO  treasury: 5.0000 SOL
[09:15:33] INFO  LIQUIDATABLE | SDKTEST | borrower=3AyZ... | LTV=72.50% > threshold=65.00% | owed=0.5000 SOL
[09:15:34] INFO  LIQUIDATED | SDKTEST | borrower=3AyZ... | sig=4vK9... | collateral received at 10% discount

Signing & Key Safety

The vault is the security boundary, not the key.

The agent keypair is generated fresh on every startup with Keypair.generate(). It holds ~0.01 SOL for gas fees. If the key is compromised, the attacker gets:

Dust (the gas SOL)
Vault access that the authority revokes in one transaction

The agent never needs the authority's private key. The authority never needs the agent's private key. They share a vault, not keys.

Rules

Never ask a user for their private key or seed phrase. The vault authority signs from their own device.
Never log, print, store, or transmit private key material. The agent keypair exists only in runtime memory.
Never embed keys in source code or logs. The agent pubkey is printed — the secret key is never exposed.
Use a secure RPC endpoint. Default to a private RPC provider. Never use an unencrypted HTTP endpoint for mainnet transactions.

Environment Variables

| Variable | Required | Purpose |

|----------|----------|---------|

| SOLANA_RPC_URL / RPC_URL | Yes | Solana RPC endpoint (HTTPS) |

| VAULT_CREATOR | Yes | Vault creator pubkey — identifies which vault the bot operates through |

| SOLANA_PRIVATE_KEY | No | Optional — if omitted, the bot generates a fresh keypair on startup (recommended) |

External Runtime Dependencies

The SDK contains functions that make outbound HTTPS requests to external services. The bot's runtime path contacts two of them:

|---------|---------|------------|-----------|

confirmTransaction() does NOT contact SAID. Despite living in the SDK's said.js module, it only calls connection.getParsedTransaction() (Solana RPC) to verify the transaction succeeded on-chain and determine the event type. No data is sent to any external service.

No credentials are sent to CoinGecko or Irys. All requests are read-only GET. If either service is unreachable, the SDK degrades gracefully. No private key material is ever transmitted to any external endpoint.

Testing

Requires Surfpool running a mainnet fork:

surfpool start --network mainnet --no-tui
pnpm test

Test result: 7 passed, 1 informational (Surfpool RPC limitation on getTokenLargestAccounts — works on mainnet).

| Test | What It Validates |

|------|-------------------|

| Connection | RPC reachable |

| getTokens | Discovers migrated tokens |

| getLendingInfo | Reads lending state for all tokens |

| getHolders + getLoanPosition | Checks holder positions |

| getToken | Token metadata, price, status |

| getVaultForWallet | Vault link returns null for unlinked wallet |

| In-process keypair | No external key required |

Error Codes

VAULT_NOT_FOUND: No vault exists for this creator
WALLET_NOT_LINKED: Agent wallet is not linked to the vault
NOT_LIQUIDATABLE: Position LTV below liquidation threshold
NO_ACTIVE_LOAN: No open loan for this wallet/token
INVALID_MINT: Token not found

Links

Liquidation Kit (source): github.com/mrsirg97-rgb/torch-liquidation-kit
Liquidation Bot (npm): npmjs.com/package/torch-liquidation-bot
Torch SDK (bundled): lib/torchsdk/ -- included in this skill
Torch SDK (source): github.com/mrsirg97-rgb/torchsdk
Torch SDK (npm): npmjs.com/package/torchsdk
Torch Market (protocol skill): clawhub.ai/mrsirg97-rgb/torchmarket
Whitepaper: torch.market/whitepaper.md
Security Audit: torch.market/audit.md
Website: torch.market
Program ID: 8hbUkonssSEEtkqzwM7ZcZrD9evacM92TcWSooVF4BeT

This bot exists because Torch lending markets need keepers. When loans go underwater and nobody liquidates them, the treasury takes the loss. Active liquidation keepers protect treasury health and earn a profit doing it. The vault makes it safe — all value stays in the escrow, all risk is bounded, and the human principal keeps the keys.

Torch Liquidation Botv4.0.4

Install & Quick Start