# Liquidation

## Criteria

The LAMM protocol uses a premium model, similar to the fixed term borrowing. The liquidation criteria is that

* the interest accrued to the position surpasses the upfront premium, or 
* the current time crosses 3 days after the LP reclaims the liquidity. 

As long as these two conditions are not met, even if the price of a token may move in the opposite direction as your trade, the position won't be liquidated.

The interest accrual rate is pegged to the underlying AMM, more details are in the [Yield](https://docs.particle.trade/earning/provide-liquidity#yield) section. More details for LP to reclaim the liquidity are in the [Reclaim](https://docs.particle.trade/earning/provide-liquidity#reclaim) section.

## Process

The frontend surfaces a liquidation page for all positions that are liquidatable or about to become liquidatable. 

Anyone can be a liquidator for any liquidatable position. The liquidation reward is 5% of the position premium.

After liquidation, the LP will get the borrowed liquidity back, together with the swapping fee generated during the borrowing period. The borrower will get a PnL realized at the price point of liquidation event, minus the liquidation reward.