> For the complete documentation index, see [llms.txt](https://ezfi.gitbook.io/ez-finance/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://ezfi.gitbook.io/ez-finance/liquidation-bounty/what-is-liquidation-and-liquidation-bounty.md).

# What is Liquidation & Liquidation Bounty?

**Liquidation** occurs when leveraged positions on EZ-FI (>1x) have a Debt Ratio >= 90%. When this happens, liquidators can liquidate these positions by repaying the debt (partially or fully) and earn **liquidation incentives**. The liquidation varies for each liquidity pool.

For higher-volatile assets eg. APT, ETH, BTC, liquidation bounty can be as close to \~5% of the debt amount the liquidator repaid; while for lower-volatile assets eg. DAI, USDT, USDC, liquidation bounty is lower but can be as close to \~3% of the debt amount the liquidator repaid.

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*Note: The liquidation bounty will be paid in the form of LP tokens.*
{% endhint %}

For instance, if liquidators liquidate a position with the collateral value equivalent to 100 APT by repaying 90 APT (90% LTV). Liquidators will get LP token back in a value equivalent to \~95 APT (EX. liquidation bounty for APT = 5%) and User will get LP token back in a value equivalent to \~5 APT