If auction has no bidder, the liquidator can claim the NFT. The impact is severe:
After the auction period, the collateral will be released to the initiator. Essentially, the initiator gets the NFT for free. But the lenders of the loan take the loss.
However, the lenders should have the claim to the collateral, since originally the funds are provided by the lenders. If the collateral at the end is owned by whoever calls the liquidation function, it is not fair for the lenders. And will discourage future users to use the protocol.
In CollateralToken contract
Note the code:
The code above will send the NFT to liquidator inside of the lenders.
If there is no bidder for the auction, allow the NFT to get auctioned for another chance.
