Docs / Liquidations

Liquidations

When a vault's health factor drops below 1, the Stability Pool absorbs the debt and the collateral — keeping qUSD fully backed.

Trigger

A vault becomes eligible for liquidation the moment its health factor falls below 1.0 — either because debt grew or collateral value fell.

Detect

Health < 1.0

Oracle price update

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Absorb

Pool burns debt

qUSD offset from pool

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Distribute

Collateral to pool

Pro-rata to depositors

Any collateral remaining above the debt stays with the vault owner.

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Maintain a comfortable buffer above your liquidation price, and repay or add collateral when markets move against you.