> For the complete documentation index, see [llms.txt](https://ketro.gitbook.io/ketro-docs/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://ketro.gitbook.io/ketro-docs/liquidations.md). # Liquidations ### When A loan becomes liquidatable when its health factor falls below 1 — debt has reached 70% of collateral value (the threshold tightens in the last 7 days before resolution; see the early-close ramp). Liquidation is **partial by default**: at most half the debt is repaid per call (close factor 50%). Below a health factor of 0.9 the loan may be closed in full. ### Who profits — deliberately nobody Ketro's liquidation pays its caller **nothing**. The pool repays the debt from its own assets, and the seized collateral plus the 5% bonus go to the protocol treasury — never to whoever triggered the call. This is not modesty; it is the security model. Ketro's price feed is operated by the protocol itself, and whoever can write a price must not be able to profit by acting on it. Removing the payout removes the motive for self-dealing rather than trying to prevent it technically. Moving anything out of the treasury is a separate, timelocked path. ### What happens to seized collateral Seized collateral is an outcome token of a market that has just fallen — holding it to resolution would be a directional bet the protocol never chose. The treasury exposes a **permissionless complement swap**: anyone delivers the opposite outcome token, the contract merges the full set back into pUSD at the CTF's fixed $1, and pays the deliverer the fair value of what they brought plus an incentive (capped at 10%). Polymarket's exchange matches orders off-chain, so a contract cannot take order-book liquidity. The swap inverts that: the order book comes to the protocol. Atomic, on-chain, no operator — and if nobody comes, the treasury simply holds to resolution, which is where it started. --- # Agent Instructions This documentation is published with GitBook. GitBook is the documentation platform designed so that both humans and AI agents can read, navigate, and reason over technical content effectively. Learn more at gitbook.com. ## 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, and the optional `goal` query parameter: ``` GET https://ketro.gitbook.io/ketro-docs/liquidations.md?ask=&goal= ``` `ask` is the immediate question: it should be specific, self-contained, and written in natural language. `goal` is optional and describes the broader end goal you are ultimately trying to accomplish on behalf of the user. GitBook uses it to tailor the answer towards what is most useful for that goal. 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.