> For the complete documentation index, see [llms.txt](https://docs.polarise.org/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.polarise.org/security/risk-framework/liquidation.md).

# Liquidation

## NFT Leverage

At Polarise, we understand that borrowers may be vulnerable to liquidation risks caused by price volatility during the loan period. That's why we designed our NFT Leverage module to eliminate this risk. As a result, when borrowers borrow P-Token against their NFT, they can rest assured that they won't be liquidated due to market fluctuations during the loan period.

If borrowers repay the calculated P-Token amount before the loan expiration date, they can retrieve their NFT. However, if they miss the deadline, they will enter a grace period before liquidation. The grace period is equal to the loan duration multiplied by 0.2 (there is no grace period for ERC-1000 standard collections). For example, if the loan duration is 30 days, the borrower has until the 36th day to repay the loan before liquidation occurs. Please note that interest will still accrue during the grace period.

At Polarise, we prioritize the security and convenience of our users. Our NFT Leverage module offers flexible loan terms and eliminates the risk of liquidation, making it a reliable option for borrowers looking to leverage their NFTs.

The liquidated NFT will be directly sent to "NFT Vault" for trading. See [Flash Trade](broken://pages/JiaYj99nA9d75BdEEjpo) for more details.

## Consignment

Consignment has the same liquidation logic as NFT Leverage. Sellers must pay back the upfront payment and custody fee before the grace period ends.

The consigned NFT will also be liquidated if the seller does not pay back on time, and it will be directly sent to "NFT Vault" for trading.

<figure><img src="/files/YyQJigs7MpkVrgv0mgZR" alt=""><figcaption></figcaption></figure>

<figure><img src="/files/TDEANHhQSMjwJsSvuQdN" alt=""><figcaption></figcaption></figure>

##

###


---

# 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.polarise.org/security/risk-framework/liquidation.md?ask=<question>&goal=<endgoal>
```

`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.