# Liquidation Model In the event where, on a specific Collateral Account, the Collateral Factor reaches the Liquidation Threshold, a liquidation process takes place in order to protect lending pools from losses. The basic idea is to sell a portion of the collateral so that the proceeds can cover the loan repayment plus a reward for the Liquidator. We consider the following example where 2 loans in Token A and Token B are collateralized by LP Tokens A/B. * If the value of the Collateral is higher than the value of the loans plus the Liquidation Reward, **Securd** determines the amount of collateral to deliver to the Liquidator against repaying both loans. The remaining collateral is left in the Borrower's Collateral Account. * If the value of the Collateral is lower than the value of the loans plus the Liquidation Reward, **Securd** will determine the amount of the loans to be repaid against delivering the entire collateral to the Liquidator. The resulting loss will be supported by both Lending Pool equally. --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://docs.securd.org/documentation/securd-models/liquidation-model.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.