> For the complete documentation index, see [llms.txt](https://docs.pulselend.com/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.pulselend.com/protocol-info/liquidations.md).

# Liquidations

## Liquidation Incentives

Extra collateral is provided to liquidators as a motivation to carry out liquidations and maintain the protocol's solvency. A part of this collateral is allocated to the sToken reserves in accordance with the protocol's seize share, mitigating the possibility of insolvency due to a chain reaction of liquidations. The Liquidation Incentive amounts to 10% of an under-collateralized account's outstanding debt, with 30% of that sum being returned to the protocol reserves.

The liquidation incentives will steadily increase over time to entice engagement, beginning at 10% plus a premium to allow the discount to rise as a function of how under-water a position is. The market forces will dictate how high it needs to be.