Glossary
Liquidation Threshold
The liquidation threshold is the level at which a position can be closed because collateral is no longer sufficient.
Plain-English meaning
Liquidation Threshold is used here to describe point where collateral fails. In the daily board, the word is grouped by the role it performs rather than by spelling or market popularity.
You may encounter it in a product interface, technical document, risk report, policy paper, or market dashboard. The term is included for recognition and comparison, not as a product recommendation.
Why it belongs with DeFi Credit Risk
These words explain how overcollateralized lending keeps accounts healthy until prices move.
When solving the puzzle, compare the job this term performs with nearby cards. A correct group usually shares a function, risk type, workflow, or market structure rather than simply sharing similar wording.
Where you might see it
You might encounter this term while reading educational explainers, product documentation, risk disclosures, market dashboards, or beginner guides. Always separate vocabulary learning from financial decision-making.