Liquidation threshold
The collateral parameter used to determine when a borrowing position becomes eligible for liquidation.
In more detail
A liquidation threshold tells the protocol how much support a collateral asset contributes before a position becomes unsafe under its rules. Positions with several collateral assets may use a weighted calculation. It's separate from the maximum allowed LTV for new borrowing, and its value depends on the asset, configuration and protocol.
How you might use it
An asset’s borrowing limit and liquidation threshold are different percentages, so reaching the borrowing limit doesn’t automatically mean immediate liquidation.
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