# Liquidation Execution

In Leveraged Volatility Farming (LVF), user positions are collateralized by LP tokens composed of a deposited pTKN and a borrowed paired asset. These LP tokens serve as both the yield-bearing position and the collateral backing the loan. Once the position’s **Loan-to-Value (LTV)** exceeds **83.33%**, it becomes eligible for liquidation.

Liquidation is **permissionless** and **atomic**, meaning a third party may repay any amount of the outstanding debt and receive **110% of the repaid amount** in collateral. The 10% bonus comes directly from the borrower’s equity.

Importantly, liquidators are not required to close the entire position. If slippage or LP depth would make a full liquidation unprofitable, **they may choose to execute partial liquidations**, seizing only as much collateral as is profitable in that moment. This makes liquidation behavior responsive to real-time market conditions and reduces the risk of cascading price impact.

**Example — Full Liquidation at Threshold**

| **Metric**               | **Value**   |
| ------------------------ | ----------- |
| Total Collateral Value   | $10,000.00  |
| Max LTV                  | 83.33%      |
| Debt at Liquidation      | $8,333.00   |
| Liquidator Repays        | $8,333.00   |
| Liquidator Receives      | $9,166.30   |
| **Liquidator Profit**    | **$833.30** |
| Borrower Retains         | $833.70     |
| **Borrower Equity Lost** | **50%**     |

**Formula Summary**

* **Max Debt** = Collateral × 83.33%
* **Liquidator Reward** = Debt Repaid × 110%
* **Remaining Collateral** = Total Collateral − Liquidator Reward
* **Borrower Equity Lost (at threshold)** = 50%