> For the complete documentation index, see [llms.txt](https://docs.peapods.finance/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.peapods.finance/liquidations-lvf/understanding-liquidation-prices.md).

# Understanding Liquidation Prices

In Leveraged Volatility Farming (LVF), understanding how your **liquidation price adjusts in real time** is key to managing risk. Your position’s liquidation threshold is directly influenced by the price ratio between your paired asset (e.g. pfWETH, pfUSDC) and your Pod asset (pTKN).

This is because **your borrow debt is denominated in the paired asset**. As that asset changes in value relative to pTKN, your liquidation price dynamically shifts:

* If the **paired asset strengthens** against pTKN, your **liquidation price rises**, increasing your risk of liquidation.
* If **pTKN strengthens** against the paired asset, your **liquidation price falls**, giving you more room to absorb volatility.

In other words, liquidation risk is driven not just by pTKN’s absolute price, but by its **relative performance**. Users should always consider the volatility and correlation between their chosen pair when estimating how resilient their position is to market movement.


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