Lending Liquidation Price Calculator
On a DeFi lending protocol your collateral can be liquidated once its value falls far enough that your debt reaches the protocol's liquidation threshold. The liquidation price is the collateral price at which that happens: debt divided by collateral quantity times the threshold. This calculator takes your collateral quantity, the current collateral price, your outstanding debt, and the liquidation threshold, then returns the liquidation price, the current loan-to-value, and the percentage cushion before liquidation.
Liquidation price formula
Liquidation price = debt / (collateral quantity * threshold decimal)
Threshold decimal = liquidation threshold / 100
Current loan-to-value = debt / (collateral quantity * current price) * 100
Price cushion = (current price - liquidation price) / current price * 100
Liquidation begins when the collateral price falls to the liquidation price. The cushion shows how far the price can drop before that happens, as a percentage of the current price.
Using the result
- A lower liquidation threshold (more volatile asset) raises the liquidation price and shrinks the cushion.
- Repaying debt or adding collateral lowers the liquidation price and widens the cushion.
- Accrued borrow interest increases debt over time, pushing the liquidation price up.
- Protocols use oracle prices that may differ from the spot price you see on an exchange.
- Monitor your position continuously; thresholds can change by governance vote.
Liquidation price: frequently asked questions
What is a liquidation price in DeFi lending?
The liquidation price is the collateral asset price at which a loan becomes eligible for liquidation. It is the point where the value of your collateral times the protocol's liquidation threshold drops to equal your outstanding debt. Below this price a liquidator can repay part of your debt and seize collateral at a discount.
How do you calculate the liquidation price?
The liquidation price equals the debt value divided by the product of the collateral quantity and the liquidation threshold (expressed as a decimal). When the collateral price falls to this level, the borrowed amount equals the maximum the protocol will lend against the collateral, triggering liquidation.
What is the liquidation threshold?
The liquidation threshold is the maximum loan-to-value a position may reach before it can be liquidated, set per collateral asset by the protocol. An 80 percent threshold means liquidation begins when debt reaches 80 percent of collateral value. Volatile assets carry lower thresholds; stable assets carry higher ones.
How is the liquidation threshold different from the loan-to-value?
The maximum loan-to-value is the most you can borrow when opening a position; the liquidation threshold is the higher ratio at which an existing position is liquidated. The gap between them is a safety buffer. Borrowing at the maximum LTV leaves you close to the liquidation threshold immediately.
Does this guarantee my position is safe above the liquidation price?
No. Protocols use oracle prices that can differ from spot, thresholds can be changed by governance, and accrued interest raises your debt over time, moving the liquidation price up. Treat the figure as a planning estimate based on the inputs you provide and monitor your health factor continuously.
Official sources
- Ethereum.org: Decentralized finance lending and collateral.
- U.S. CFTC: Digital assets education center.
Reviewed by the CalculatorHub team, edited by James Graham, 17 June 2026. See our methodology.