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Liquidation Ratio
The minimum collateral ratio a borrowing position must maintain in a DeFi lending protocol before it becomes eligible for liquidation. Also called the Liquidation Threshold. For example, if AAVE's liquidation threshold for ETH is 82%, a position with $100 in ETH collateral can be liquidated if the borrow amount exceeds $82. Liquidation ratios vary by collateral type — more volatile assets have lower (more conservative) thresholds.
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