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Resources / Mechanics

Mechanics

Partial vs full liquidation

Some lenders sell only enough to restore LTV. Others can liquidate the whole position. That changes outcomes in a drawdown.

Partial liquidation

The lender sells only enough collateral to restore a target LTV. You may keep a large share of your Bitcoin after the event.

Full liquidation

The whole position can be sold when the trigger hits. Collaborative multisig and some DeFi paths lean this way for operational reasons.