Liquidation

Liquidation is the automatic closure of a leveraged or borrowed position after its collateral falls below the required maintenance level. You cannot pause it once the trigger is reached. The platform or a designated liquidator closes the position, often with an extra penalty.

Example: if a borrowed asset falls far enough that your collateral no longer covers the loan, the lending market can sell that collateral to repay it.

For perps, higher leverage means a smaller adverse price move can trigger liquidation. For lending, the trigger depends on the collateral value relative to the loan. Both systems protect the market from positions that can no longer cover what they owe.

Trigger prices, penalties, and partial-liquidation rules vary by platform. Check them before opening any leveraged or borrowed position.

See our lending risk and liquidation guide for the full mechanics, and our Perpetuals category page for how this applies specifically to leveraged perps trading across the platforms in our Perp DEX Rankings.