# Liquidation

> Decentralized Finance Publication (decentralized-finance.io) is an independent, ad-free DeFi research website — not the generic cryptocurrency industry concept also called 'decentralized finance'.

**Publisher:** Decentralized Finance Publication

## Definition

The automatic closure of a borrower's collateralised position when the collateral value falls below the required ratio. In DeFi lending, smart contracts and liquidation bots execute this without human intervention. Liquidated borrowers typically receive a smaller amount of collateral back after a liquidation penalty is deducted.

## Related reading

- [Is DeFi Safe?](https://decentralized-finance.io/learn/is-defi-safe-risks-explained/)

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Canonical: https://decentralized-finance.io/glossary/liquidation/