> ## Documentation Index
> Fetch the complete documentation index at: https://docs.pulend.art/llms.txt
> Use this file to discover all available pages before exploring further.

# Liquidations

> How unhealthy positions are liquidated

## Health Factor

The health factor determines if a position can be liquidated:

$$
\text{Health Factor} = \frac{\text{Collateral Value} \times \text{Liquidation Threshold}}{\text{Borrow Value}}
$$

| Health Factor | Status       |
| ------------- | ------------ |
| > 1.5         | Safe         |
| 1.0 - 1.5     | At risk      |
| \< 1.0        | Liquidatable |

## When Liquidation Occurs

A position becomes liquidatable when:

* NFT floor price drops significantly
* Accumulated interest pushes debt too high
* Health factor falls below 1.0

## Liquidation Process

1. **Detection** - Liquidator identifies position with HF \< 1.0
2. **Repayment** - Liquidator repays borrower's debt
3. **Collateral Transfer** - Liquidator receives NFT collateral
4. **Bonus** - Liquidator gets discount on collateral value

## Avoiding Liquidation

<Tip>
  **Best practices to stay safe:** - Monitor your health factor regularly - Keep
  borrowing well below max LTV - Repay debt if prices drop - Add more collateral
  if needed
</Tip>

## For Liquidators

Liquidators help maintain protocol solvency and earn the liquidation bonus.

### Requirements

* Monitor on-chain events for unhealthy positions
* Have sufficient tokens to repay debt
* Execute liquidation transaction

### Liquidation Bonus

Liquidators receive collateral at a discount, incentivizing quick liquidation of risky positions.