> For the complete documentation index, see [llms.txt](https://guides.instadapp.io/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://guides.instadapp.io/protocols/compound/liquidations-on-compound-v2.md).

# Liquidations on Compound v2

### Liquidations on Compound

Compound has an open liquidation system. Anyone can purchase assets from undercollateralized positions in exchange for paying off that position's debt. Liquidated assets have a close factor which limits how much debt can be repaid at one time so Compound allows for partial liquidations. 

If a position is severely undercollateraized it may be liquidated multiple times. The liquidation penalty is passed to the purchaser through a discount on the debtors asset. This method allows for debt to be cleared from the Compound protocol. To learn more about the liquidation penalities see 

### What happens when your liquidated on Compound

If your position is undercollateralized a user or bot may liquidate your position buying your collateral assets at a discount and paying off your debt. Liquidators decide which asset they purchase from the undercollaterlized position if your position has multiple assets as collateral.

### Are liquidations different between v2 and v3 Compound?

Yes! Check out this page to learn how positions are liquidated on Comp v2