> For the complete documentation index, see [llms.txt](https://sandcastle.gitbook.io/sand-castle-finance/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://sandcastle.gitbook.io/sand-castle-finance/liquidations/what-is-a-liquidation.md).

# What is a liquidation?

A liquidation is essentially when the total value of the position or collateral in a loan goes below how much the lender provided when the loan was formed. Liquidations in SandCastle are instant and complete to limit the potential for bad debt. 

Within SandCastle a liquidation can occur for both Uniswap V3 positions and regular loans. 

### Uniswap V3 Position

When a leveraged Uniswap V3 position is liquidated, all of the funds in the position are converted to the provided token via an approved [route](/sand-castle-finance/routers/what-are-routers.md). Then, if that total amount of value passes below a threshold defined by the total value of provided tokens + a buffer + a fee, then the user is liquidated. 

## Regular Loans

When a regular loan is liquidated, the collateral is converted to the provided token. If this amount is less than the threshold defined by the total value of the provided tokens + a buffer + a fee, then the user is liquidated.