> For the complete documentation index, see [llms.txt](https://docs.port.finance/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.port.finance/port-finance-variable-rate-lending/liquidation.md).

# Liquidation

Liquidation occurs when a user's total borrow has reached a threshold, i.e. the risk factor is greater than or equal to 100%.

$$
RiskFactor = \frac{ \Sigma\_{borrow}  MarketValue\_{borrow}}{ \Sigma\_{collateral} LiquidationThreshold\_{collateral} \* MarketValue\_{collateral}}
$$

Risk factor represents the overall liquidation risk for a given users. When the users add more collateral into the protocol, the risk reduces. Conversely when the users borrow more, the risk increases.

When a user has reached its liquidation threshold, up to 50% (in terms of market value) of the total borrowed asset is sold to the liquidator at a discounted price to repay a portion of the loan.