# Liquidation Event

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Liquidation events are triggered by surpassing thresholds established by collateral factors (which determine initial borrowing capacity). Once an account's borrow balance surpasses these predetermined limits, it becomes eligible for liquidation.

A liquidator (such as a bot, contract, or individual) can initiate the absorb function, which transfers ownership of the account's collateral while returning the collateral's value, minus a liquidation penalty, to the user in the base asset. As a result, the liquidated user's debt is eliminated, and they typically maintain an excess balance of the base asset, which generates interest.

| Close Factor           | 50% |
| ---------------------- | --- |
| Liquidiation Incentive | 8%  |