> For the complete documentation index, see [llms.txt](https://docs.convergent.so/convergent/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.convergent.so/convergent/convergent-protocol-v1/liquidation.md).

# Liquidation

The Convergent protocol relies on the Pyth JITOSOL:USD price feed for accurate collateral valuation and facilitates USV borrowing and liquidation mechanism. When a Position falls below a minimum collateralization ratio of 110%, it is considered under-collateralized, and is vulnerable to liquidation.

## **Trigger of liquidation**

To guarantee that the entirety of outstanding USV supply is backed by collateral, any Position that falls under the 110% minimum collateral ratio will be closed, i.e. liquidated. The Nexus will absorb the debt and its collateral will be distributed among all Nexus Deposit users on a pro-rata basis. 

## Implication of liquidation

The full amount of USV borrowed is still retained by the owner of the Position, but they experience an overall loss of approximately 10% in value. Therefore, it is vital to maintain a ratio above 110%, preferably above 150%.