# Liquidation ### Current Implementations on Other Protocols Most lending protocols rely on two key parameters to determine liquidation criteria: * **LTV** (loan-to-value); * **Liquidation** **threshold.** Loans are considered “unhealthy” if a borrower’s total collateral adjusted by the liquidation threshold (a number < 1) falls below the borrower’s debt, including interest. This makes loan health almost entirely dependent on the LTV ratio. ### The Voyage Solution In Voyage's case, loans are a fundamentally different product. 1. Loans have fixed terms with fixed interest rates that are not rebalanced mid-loan; 2. Loans are collateralized by less liquid **non-fungible assets (NFTs)**. Therefore, it is critical for the protocol to incentivize regular repayments. Consequently, liquidation is triggered when the condition of $$TPD(\alpha) \geq 0$$ is met. In effect, this implies that payments must be made in a timely manner, else both the previously paid instalments will be forfeited and the NFTs will be liquidated to repay the lenders. ### Liquidation Mechanism In order to prevent large liquidations from causing the floor price to fall unnecessarily, the protocol applies a **liquidation discount** for the NFTs. If $$floorPrice \gt debt$$, a **discount** of $$LB$$ is applied. --- # 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.voyage.finance/voyage/whitepaper/voyage-buy/liquidation.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.