Liquidations are core to the solvency of the cypher margining system. The protocol distinguishes between two types of accounts - trading accounts and minting accounts - which have different liquidation rules. When a trader's trading account falls below a c-ratio of 140% or their minting account c-ratio falls below 110%, their position(s) become open for liquidation. Liquidators are incentivized to step in and pay off the liabilities owed by the account until the users c-ratio is back above 150% or 115%, respectively. Liquidators receive a liquidation fee of 5% (in the form of a discount on the collateral they provide) for maintaining the solvency of the protocol.
Because of the speed and low cost of Solana, and as implied above, liquidations can be partial. Falling below a maintenance margin level does not necessarily lead to full liquidation of a position, as it does on some blockchains and protocols.
Recall from from the collateral and margin section that for trading accounts, 140% represents a traders maintenance trading c-ratio and for minting accounts, 110% represents a minters maintenance minting c-ratio.