> 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. --- # Agent Instructions This documentation is published with GitBook. GitBook is the documentation platform designed so that both humans and AI agents can read, navigate, and reason over technical content effectively. Learn more at gitbook.com. ## Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter, and the optional `goal` query parameter: ``` GET https://docs.port.finance/port-finance-variable-rate-lending/liquidation.md?ask=&goal= ``` `ask` is the immediate question: it should be specific, self-contained, and written in natural language. `goal` is optional and describes the broader end goal you are ultimately trying to accomplish on behalf of the user. GitBook uses it to tailor the answer towards what is most useful for that goal. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.