> For the complete documentation index, see [llms.txt](https://docs.hubbleprotocol.io/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.hubbleprotocol.io/faq/usdh-vault/stability-vault-liquidations.md). # Stability Vault Liquidations ### **What are liquidations?** Liquidations occur when an open position reaches the maximum LTV of a given vault. This means a user doesn't have enough collateral to support their borrowing. Liquidations occur when the crypto market goes down in value. You can deposit $1,000 worth of SOL on Monday, and on Wednesday that value can be $800. If the value of your deposit gets too low and you do not pay back USDH, your deposit will be forfeited. Head to the [Liquidations section](/faq/liquidations.md#how-do-liquidations-work) for more info. ### How do USDH Vault liquidations work? The USDH Vault (formerly Stability Pool) acts as an automatic liquidator in Hubble's hybrid liquidation model. USDH is designed to be backed by collateral at all times, and the USDH Vault helps guarantee this backing. Users can provide USDH to the USDH Vault to earn liquidation rewards received in collateral assets. When a liquidation is triggered, USDH is burned to cover a liquidated user's debt, and forfeited collateral is distributed to USDH Vault providers. As USDH Vault providers' USDH deposits decrease, their liquidation rewards increase. The tokens earned as liquidation rewards should be \~10% more valuable than the amount of USDH burned at the time a liquidation is triggered. ### Which assets are liquidated via the USDH vault? All assets from Hubble's DeFi Treasury. ### **How are liquidation rewards allocated to the USDH Vault?** Liquidation rewards are awarded proportionally to your % contribution to the pool. If your contribution constitutes 1% of the USDH Vault, you will receive 1% of all liquidation rewards. ### **Do USDH Vault providers make net gains from liquidations?** Yes. If a liquidation occurs, a USDH Vault provider's USDH balance will decrease, but the net value of their account will increase. For every 1 USDH paid, USDH Vault contributors receive $1.1 worth of collateral. Essentially, contributors receive other users' collateral assets at a 10% discount. \ \ Here’s an [overview](https://hubble-markets.gitbook.io/hubble-protocol-official-docs/about-hubble/stability-pool) of our USDH Vault. ### **What happens with liquidations when the USDH Vault is empty?** When the vault is empty, liquidations are redistributed amongst all debt holders. This means that both the collateral assets and the USDH debt of the liquidated position are distributed amongst current borrowers. A full explanation of Redistribution is available [here](/faq/liquidations/redistribution.md). --- # Agent Instructions This documentation is published with GitBook. GitBook is the documentation platform designed so that both humans and AI agents can read, navigate, and reason over technical content effectively. Learn more at gitbook.com. ## 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, and the optional `goal` query parameter: ``` GET https://docs.hubbleprotocol.io/faq/usdh-vault/stability-vault-liquidations.md?ask=&goal= ``` `ask` is the immediate question: it should be specific, self-contained, and written in natural language. `goal` is optional and describes the broader end goal you are ultimately trying to accomplish on behalf of the user. GitBook uses it to tailor the answer towards what is most useful for that goal. 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.