# Liquidations ## What are liquidations? Liquidations are a key mechanism in UWU Protocol that ensures that UWU is backed by sufficient collateral. In the event that a Vault fails to maintain a minimum collateral ratio of 150%, the Vault is liquidated (closed). During a liquidation, liquidators are able to acquire the collateral held in a Vault by repaying the Vault's debt. ## How do UWU Protocol liquidations differ from others? UWU Protocol employs a unique multi-party liquidation mechanism that offers low barriers to entry, instant execution, and higher incentives. Here are some of its key features: * Collateral isn't sold via an auction * Multiple users can liquidate a single Vault * The entire collateral of a Vault is sold * No grace periods or partial liquidations occur * No fees are charged for liquidating a Vault Those participating in the liquidation of a Vault can repay any amount of debt, as long as the Vault's debt balance is greater than 25 UWU. If a Vault's debt balance is 25 UWU, the liquidator must resolve the total debt. ## How can I avoid getting liquidated? To avoid liquidation, ensure that the collateral ratio of your Vault stays above 150%. To minimize the potential loss of collateral, it's crucial to monitor your Vault and adjust its collateral ratio. To increase its collateral ratio, you can deposit collateral and/or repay debt. ## Who can liquidate Vaults? Anyone can liquidate a Vault if its collateral ratio is below 150%. ## How do I benefit as a liquidator? As liquidations happen just below a collateral ratio of 150%, you will most likely experience a net gain when liquidating a Vault. For example, let's say a Vault has $1,500 worth of STX collateral and 1,000 UWU of debt. If the value of the collateral drops to $1,490, the collateral ratio falls below the 150% minimum, and the Vault is liquidated. If you repay 500 UWU of debt, you will receive 50% of the Vault's collateral. Assuming the STX price remains constant and that UWU is valued at $1.00, the collateral you will receive would be worth $745. This would result in a profit of $245 in STX at the time of liquidation. ## What oracle does UWU Protocol rely on? UWU Protocol relies on [Arkadiko's STX:USD](https://explorer.hiro.so/txid/SP2C2YFP12AJZB4MABJBAJ55XECVS7E4PMMZ89YZR.arkadiko-oracle-v2-2?chain=mainnet) price feed, with plans to move to a more decentralized oracle in the future. For more information on oracle risks, please refer to the [Risk Disclosure](/resources/risk-disclosure.md) page. --- # 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.uwu.cash/uwu-protocol/liquidations.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.