Liquidation
The forced repayment or closing of a position that no longer meets its collateral or margin rules.
In more detail
In a lending protocol, a liquidator may repay part of an unhealthy debt and receive collateral under the protocol's terms. Trading systems can instead close positions to satisfy margin rules. The exact process and costs vary, and it may affect only part of a position. It's the mechanism enforcing limits, not a normal voluntary withdrawal.
How you might use it
After a loan becomes eligible for liquidation, another participant repays part of its debt and receives some of the posted collateral.
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