Liquidation Price

The liquidation price is the price at which a leveraged position is force-closed because its collateral no longer covers its debt or margin requirement. In a lending protocol, it is the collateral value at which the loan's health factor breaches the liquidation threshold. On a derivatives venue, it is the mark price at which a margin account is closed out. In general commercial use, "liquidation price" can also mean the discounted price at which assets are sold when a business winds down, but the finance usage here refers to forced position closure.

How it works

In a lending market, a borrower posts collateral and draws debt against it. Each asset carries a loan-to-value limit, and the protocol tracks a health factor derived from collateral value, debt, and oracle prices. When the collateral price falls to the point where that ratio crosses the liquidation threshold, the position becomes liquidatable. A liquidator repays part of the debt and seizes collateral at a bonus, restoring the loan to a safe ratio.

On a perpetuals or futures venue the mechanism differs. A margin account holds a position marked against a reference price. The liquidation price is the mark price at which remaining margin falls below the maintenance margin, at which point the venue or its liquidation engine closes the position. The lending case repays a debt and seizes collateral; the derivatives case flattens a margin account against a price.

What the data shows

Allium data, October 23, 2026 recorded 372 lending-protocol liquidations across 12 lending protocols on 14 chains in the last 24 hours, totaling $164,163. These figures cover lending liquidations only, a distinct mechanism from derivatives liquidation. Every one of these events is visible in transaction data at the moment it settles onchain.

Why it matters

For an institutional reader, the liquidation price marks where exposure converts into realized loss and where collateral changes hands without the borrower's consent. Clustered liquidation prices concentrate risk: when many positions share a threshold, a single price move can trigger forced selling that pushes the price further and crosses the next band of thresholds, as described in How a Liquidation Cascade Builds, Step by Step. Tracking these levels across protocols and chains supports margin monitoring, counterparty assessment, and reserve modeling.

Related terms

• Health factor
• Loan-to-value ratio
• Maintenance margin
• Collateral ratio
• Liquidation cascade

Frequently asked questions

Is the liquidation price the same on lending protocols and perps venues?

No. On lending protocols it is the collateral price that breaches the liquidation threshold and triggers debt repayment plus collateral seizure. On perps venues it is the mark price at which margin falls below maintenance and the account is closed.

What determines a loan's liquidation price?

It depends on the collateral amount, the outstanding debt, the asset's liquidation threshold, and the oracle price feed. As debt or price moves, the point where the health factor crosses the threshold shifts.

Can liquidations be observed onchain?

Yes. Lending liquidations settle as transactions, so each event, including the collateral seized and debt repaid, is visible in transaction data when it occurs.

See the data behind this post. Browse the live perps dashboard, or read How Onchain Perp DEX Volume Is Measured for how the records are put together.

Allium provides onchain data infrastructure. Companies named in this article may be Allium customers, prospects or commercial counterparties. The authors and other Allium personnel may hold positions in the assets discussed. This article is informational only and is not investment, legal or tax advice. Data and information last reviewed: October 23, 2026.