How liquidation works
When you borrow against crypto, the platform requires your collateral to be worth more than your loan. If the collateral’s value falls until debt ÷ collateral value exceeds the liquidation threshold, part of it is sold to repay the loan — usually with a penalty.
Health factor = collateral value × threshold ÷ debt. Above 1 is safe; at 1 or below, liquidation can happen. Read lending and borrowing.
FAQ
How can I lower my liquidation risk?
Borrow less relative to your collateral, add collateral when prices fall, or repay part of the loan.
Is the liquidation threshold the same as max LTV?
No. Max LTV limits how much you can borrow; the liquidation threshold is the higher line where liquidation starts.
Educational tool. Results are estimates and are not financial, tax or investment advice.