The Liquidation Mechanism is used to protect the rights and interests of the lenders and the stability of the protocol. It is fully on-chain, decentralized, and public with incentives. Liquidation is categorized as Full Liquidation and Half Liquidation based on the value of the collateral.

Liquidation Threshold

The Liquidation Threshold is the maximum acceptable LTV ratio for a loan during its lifetime. The Liquidation Threshold is 0.8 for a non-stablecoin pair's loan, a loan with any non-stablecoin being a collateral or borrowing token while the ratio is 0.925 for the stablecoin pair's loan, a loan with both collateral and borrowing tokens being stablecoins.

Please refer to for more details.

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