How do liquidations work?

Lava Loans require you to post BTC collateral sufficient to over-collateralize your loan. Loans are initiated at 50% LTV, and they are liquidated at 93% LTV.

When you initiate a loan on Lava, you'll be presented with all of your loan terms before you begin the loan. There you'll see your liquidation price, which is the bitcoin price at which your loan will be liquidated. This happens at 93% LTV— the collateral required to cover the loan capital is sent to the lender, and the remaining collateral is returned to you. This happens automatically via the bitcoin smart contract. You can learn more about Lava's price feed oracles here.

You can also close your loan early at any time without incurring additional fees, or you can repay part of your loan to lower your LTV.

Your loan will not be liquidated if you miss a monthly payment, but you will be charged a late fee until your payment is made. See this FAQ for more details on loan payments and fees.