# Liquidations Liquidations will occur when a position's LTV Ratio equals or exceeds the Liquidation Threshold. #### 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. 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](https://docs.jpegd.io/jpegd-dao/about-the-jpegd-protocol/liquidation-insurance). When liquidated, NFTs will go up for auction, and more details are available in the [**Auctions**](https://docs.jpegd.io/jpegd-dao/about-the-jpegd-protocol/auctions) section of the documentation.