> For the complete documentation index, see [llms.txt](https://docs.voltage.finance/voltage/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.voltage.finance/voltage/the-platform/lend-and-borrow-beta/liquidations.md).

# Liquidations

The Health Factor is a key metric in Voltage Lending. It indicates how safe a user’s borrow position is relative to the value of their collateral. If the health factor falls below 1, the position becomes eligible for liquidation.

## Health Factor Formula

```
Health Factor = (Collateral Value × Liquidation Threshold) / Borrowed Value
```

* A Health Factor > 1 means your position is safe.
* A Health Factor < 1 means your loan may be liquidated.

Let’s say a user supplies $1,000 of USDC with an 80% liquidation threshold, and borrows $700 of another asset. The health factor would be:

```
($1,000 × 0.80) / $700 = 1.14
```

As long as the health factor stays above 1.0, the user remains safe.

***

## How Liquidation Works

When a borrower’s health factor drops below 1, a portion of their debt becomes eligible for liquidation. This means that a liquidator can repay up to 50% of the user’s borrowed amount and, in exchange, receive a discounted portion of the collateral.

* Triggered by: Drop in collateral value or increase in borrow value
* Repaid by: A third-party liquidator (any user on the network)
* Liquidation Bonus: Applied to the collateral seized by the liquidator

Liquidation helps maintain the solvency of the protocol and ensures that funds remain available for other users.

***

## Why Your Health Factor May Drop

* Collateral loses value (e.g. market dip)
* Borrowed asset increases in value
* Accrued interest increases your borrow position
* Stablecoins depeg or experience volatility

To avoid liquidation, users can:

* Repay part of their borrowed amount
* Supply more collateral
* Monitor asset prices regularly (via the dashboard)

***

## Liquidation Parameters

| **Parameter**         | **Value (example)**          |
| --------------------- | ---------------------------- |
| Liquidation Threshold | Set per asset (e.g. 80%)     |
| Max Repay Amount      | Up to 50% of borrowed value  |
| Liquidation Bonus     | Applied to seized collateral |
| Trigger Condition     | Health Factor < 1.0          |
| Oracles Used          | Supra Oracles                |

All pricing and health factor calculations are powered by Supra, ensuring real-time and secure oracle data on the FUSE network.

***

#### Who Can Liquidate?

Anyone. Liquidations on Voltage are permissionless. Users or bots can monitor the protocol and initiate a liquidation as soon as a position becomes unhealthy. It’s a competitive process often done by bots or experienced DeFi users.

{% hint style="warning" %}
During Beta, liquidation mechanics are active. While caps are in place, users should monitor their health factor closely to avoid loss of collateral.
{% endhint %}