# Liquidation

*Crypto & Digital Assets — Finicade finance glossary*

Liquidation is a protocol force-selling your collateral when its value falls below the required ratio, usually with a penalty paid to whoever triggers it. It's automatic and merciless — there's no call, no grace period, and it executes in the same block. Because falling prices trigger sales that push prices lower, liquidations cascade, which is how crypto drawdowns turn violent within minutes.

**Also known as:** liquidated, liquidation cascade, getting liquidated

**Related terms:** [Overcollateralization](https://finicade.com/glossary/overcollateralization), [Lending Protocol](https://finicade.com/glossary/lending-protocol), [Margin Call](https://finicade.com/glossary/margin-call), [Oracle](https://finicade.com/glossary/oracle), [Leverage](https://finicade.com/glossary/leverage)

Source: https://finicade.com/glossary/liquidation