# Key Features of Liquidation **Trigger Mechanism** * The protocol continuously monitors CDPs to assess their collateralization ratio. * If the ratio falls below the minimum collateralization threshold, the liquidation process is initiated automatically. **Auction Process** * Liquidated collateral is put up for auction to a valid bidder. * Bidders, often known as Keepers, compete to purchase the collateral, ensuring market-driven pricing. **Liquidation Fee** * A liquidation fee is imposed on the user whose position is liquidated. * This liquidation fee is designed to discourage risky behavior and compensate the protocol for the added system risk. **Keeper Rewards** * Keepers are incentivized with rewards for participating in the liquidation process. * Rewards typically include a portion of the liquidation fee and opportunities to acquire discounted collateral. **Debt Repayment** * The proceeds from the auction are used to repay the outstanding USDD debt. * Any remaining collateral after repaying the debt and penalties is returned to the user. **Peg Stability Impact** * Liquidation ensures that excessive debt does not destabilize the peg of USDD. * By swiftly resolving undercollateralized positions, the protocol maintains its financial health. --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://docs.usdd.io/developers/liquidation-and-auction/key-features-of-liquidation.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.