The collateral ratio at which a DeFi position becomes eligible for liquidation. If your collateral drops to this level, liquidators can repay part of your debt and claim your collateral at a discount.
The collateral ratio at which a DeFi position becomes eligible for liquidation.
If your collateral drops to this level, liquidators can repay part of your debt and claim your collateral at a discount.
This is a key building block of decentralized finance. Understanding it helps you navigate DeFi protocols safely, evaluate yield opportunities, and avoid common pitfalls.