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A borrow position is liquidatable once its LTV reaches the market’s liquidation threshold (equivalently, once its health factor reaches 0.00). At that point part of your collateral can be sold to repay part of your debt, without your involvement. You will have been warned before this point (see AGI3 does not liquidate you), but the liquidation itself is automatic and happens without further notice.

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What actually triggers it

Liquidation is triggered by the position’s state at the market’s oracle price, not by any decision AGI3 makes. Three things move a position toward that state:
  1. Your collateral falls in value relative to your debt asset.
  2. Your debt asset rises in value relative to your collateral.
  3. Interest accrues on your debt, which happens continuously.
The third is the one clients most often overlook. A position opened at a comfortable LTV and then left untouched will drift toward liquidation on its own, because the debt side grows while the collateral side does not.

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The liquidation price

Each position shows a liquidation price: the collateral price at which the position reaches its liquidation threshold.
Read it as a distance. If your collateral trades at 3,000 and the liquidation price is 2,100, the position absorbs a 30% fall before becoming liquidatable. The figure is only as reliable as its assumptions:
  • It assumes your debt asset holds its value. If you borrowed a volatile asset, its own price move shifts the liquidation price, so the figure is only stable when the debt is a stablecoin.
  • It assumes debt stays constant. Accruing interest raises the liquidation price over time, so the number is a snapshot.

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What it costs

Liquidation is not a neutral unwind. A liquidator repays part of your debt and takes collateral in return, at a discount to the market price: that discount is the liquidation penalty, it is the liquidator’s incentive, and it is a direct loss to you on top of whatever price move caused the liquidation. The penalty is set per collateral class: The ordering follows liquidity: the harder the collateral is to sell quickly, the larger the discount a liquidator needs, so less liquid collateral costs more to be liquidated out of. The full parameter set per class is in Risk parameters. You keep whatever collateral is not sold, and your remaining debt is reduced correspondingly.

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How to avoid one

The first defense is borrowing below the maximum. The platform will let you borrow up to the max LTV, at which point your health factor is 1.00 and your entire buffer is unused but available. Borrowing at 60% of the maximum, for example (not to be read as a recommendation), leaves materially more room. Watch the health factor rather than the LTV. Percentages look reassuringly far apart; the health factor is scaled to the buffer that actually exists. See the worked example in Health factor. Consider the pairing itself: borrowing a volatile asset against volatile collateral means both legs can move against you simultaneously, where stable debt leaves only one. Adding collateral or repaying early both raise the health factor immediately, and doing either while a position is merely in the Monitor band is far cheaper than being liquidated out of the Critical one. The routine in Monitor positions and alerts is built around acting at that stage. Account for correlation. In a broad market fall, the assets you hold as collateral tend to fall together, and liquidity thins at the same moment. The portfolio health score models this explicitly with a crash-day scenario.

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AGI3 does not liquidate you

Liquidation is executed directly against the underlying protocol. AGI3 can neither pause nor reverse liquidations. As a position deteriorates you receive two escalating warnings (where possible, except under extreme market conditions), each delivered as both an in-platform notification and an email:
  • A margin call warning means your position has deteriorated to the point where it needs attention; adding collateral or repaying debt now restores your buffer at low cost.
  • An imminent liquidation warning means your position is approaching the liquidation threshold and could be liquidated at any moment.
Act on these promptly. The warnings do not pause or delay anything: the protocol’s rules apply the moment the threshold is crossed, whether or not the warning has been read. The margin call warning is deliberately set well before the threshold, because the point at which you can still fix a position cheaply is strictly earlier than the point of liquidation. Responding to the first warning is what keeps the second one from arriving.