Liquidation
Last updated
Last updated
In the event that your debt ratio has gone above the liquidation threshold, your position will be liquidated.
User's liquidation threshold is defined as the user's current borrow value divided by the total value the user is allowed to borrow. And the user's borrow allowance is an aggregation of user's supplied amount of an asset multiplied by the asset's collateral factor.
The dashboard section contains all the information about a user's current borrow and supply information. At the bottom of the section is Borrow Limit, which shows a percentage of user's liquidation threshold. Once the borrow limit has reached or gone over 100%, the user's account can be liquidated. By liquidating (closing) at-risk borrowing positions, Ram is able to protect users who supply assets to the protocol.
An asset’s Collateral Factor determines the proportion of its value that can be borrowed. For example, if you’ve supplied $100 of BUSD, which has a collateral factor of 70% then your Borrow Limit will increase by $70.
