# Liquidations

To keep the entire $USC supply fully backed, any shuttle that falls [**below the Minimum Collateral Ratio (MCR)**](https://doc.orby.network/overview/supported-collateral/collateral-risk-parameters) will be **fully liquidated**.

**How Liquidation Works:**

1. A shuttle is flagged for liquidation when its collateral ratio drops below the MCR.
2. A liquidator detects the flagged shuttle and starts the liquidation process.
3. The shuttle’s debt is erased using $USC from the Stability Pool (this $USC is then burned).
4. The shuttle’s collateral is distributed as follows:
   * 0.5% + the 20 $USC liquidation reserve go to the liquidator.
   * 99.5% goes to Stability Pool depositors.
5. The shuttle is closed, and the owner keeps their remaining borrowed $USC.

## Commonly asked questions

<details>

<summary>How does a liquidation impact me?</summary>

If you get liquidated, you will lose all of your collateral. However, you can keep the borrowed $USC

</details>

<details>

<summary>What can I do to avoid getting liquidated?</summary>

While it is impossible to completely avoid getting liquidated, it is recommended that you maintain your shuttle's collateral ratio above 180%

</details>


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