> For the complete documentation index, see [llms.txt](https://docs.3adao.org/3a-protocol/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.3adao.org/3a-protocol/protocol-documentation/lending/liquidation.md).

# Liquidation

The 3A protocol regularly updates the collateral asset prices via a decentralized data feed. When a Vault falls below the [Health Factor](/3a-protocol/whitelisting-criteria/risk-sensitive-parameters.md) ratio of 1, it is considered under-collateralized and is **automatically liquidated**.

{% hint style="success" %}
The liquidation mechanism is automatic, initially requiring no buyer or bidder to buy the collateral which makes the liquidation process very efficient
{% endhint %}

When a Vault gets liquidated, users keep their EURO3 but lose their collateral tokens as the debt is paid off through liquidations. Users will no longer be able to retrieve their collateral tokens by repaying the debt. 

{% hint style="danger" %}
**Liquidations result in a net loss for the Vault owner**
{% endhint %}


---

# 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:

```
GET https://docs.3adao.org/3a-protocol/protocol-documentation/lending/liquidation.md?ask=<question>
```

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.