# Liquidations

Liquidations will occur when a position's LTV Ratio equals or exceeds the Liquidation Threshold.&#x20;

#### For Example:

A user borrows 25pETH against a Cryptopunk. The floor is **50 ETH**, the max LTV is **60%** and Liquidation Threshold is at **70%**. His current LTV is of 50% and far from liquidation.&#x20;

If the floor dropped to 35 ETH and they didn't repay any of their debt, their position's LTV would reach 71%, which is higher than the Liquidation Threshold, and be liquidated.

### NFT Liquidation

When users are liquidated, the DAO repays the users' pETH/PUSd debts by burning pETH/PUSd in the DAO. User can elect to insure their position to avoid immediate liquidation.

* For uninsured positions with an active LTV Boost and/or Traits Boost, the locked $JPGD Tokens for the boost(s) will be burned instantly if liquidated.
* For [insured](https://docs.jpegd.io/jpegd-dao/about-the-jpegd-protocol/lending-mechanics/insurance) positions with an active LTV Boost and/or Traits Boost, the locked $JPGD Tokens for the boost(s) will be burned if the position is not repaid within the grace period of 48h. Learn more about [Liquidation insurance](/jpegd-dao/about-the-jpegd-protocol/liquidation-insurance.md).

When liquidated, NFTs will go up for auction, and more details are available in the [**Auctions**](/jpegd-dao/about-the-jpegd-protocol/auctions.md) section of the documentation.

<figure><img src="/files/Sb9w8tUWXaZ1zwaSTSpu" alt=""><figcaption><p>Repay a liquididated NFT</p></figcaption></figure>


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