What Are the Consequences of Liquidation?
When an order is liquidated, it triggers automatic liquidation of the collateral. Afterward, the loan is forcibly closed, which may lead to a loss of assets.
Under What Scenarios Does Forced Liquidation Occur?
| Risk Type | Trigger Condition | Typical Scenario |
| Liquidation due to Overdue Repayment | Failure to repay the loan within 24 hours after the due date | Failure to repay by the order's expiration time |
| Liquidation due to LTV Breach | LTV > 95% (LTV = borrowing amount/Collateral Value) | Sharp drop in collateral price causes LTV to spike |
How to Avoid Liquidation?
To minimize the risk of liquidation, it is strongly recommended that you set up alert emails when creating a borrowing order. These alerts enable you to monitor order status in real time and take timely action to prevent issues such as overdue repayments or a high Loan-to-Value (LTV) ratio.
| Occurrence | Action Method | Risk Mitigation Principle |
| Overdue Repayment | Set alert emails + repay on time | Timely payment reminders |
| During Order Creation | Plan collateral/loan amount to minimize LTV | Maintaining a safety buffer |
| Collateral Depreciation or Insufficiency | Add more collateral | ↑ Collateral value → ↓ LTV |
| High Loan + Collateral Value Drops | Repay early (partial/full) | ↓ Loan amount → ↓ LTV |
For specific operational methods, please refer to the "Manage Orders" section in <3. Borrowing Guide>