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Liquidations in Alchemix v3 are a system-wide safety valve, not a per-account punishment. Because loans and collateral are like-kind, with ETH backing alETH and USDC backing alUSD, market price swings do not force positions to close. The back-stop only activates if the Mix-Yield Token itself loses backing.

Liquidations in Alchemix are rare

Price volatility alone cannot trigger a liquidation. Only a loss in the underlying yield strategy, such as an exploit or a strategy reporting negative returns, can move the liquidation threshold. Day-to-day, most users will never encounter one.

When liquidation does not occur​

ETH or USDC price volatilityNone, debt and collateral move together.
alAsset drifting below peg on DEXsNone, protocol still values alAssets at face value for repayment.
Hitting the 90% LTV borrowing capBorrowing stops, the position stays open and keeps earning yield.

What can trigger liquidation​

Strategy loss, exploit, or severe slippage inside MYTOracle shows MYT NAV is less than system debt.
Position exceeds liquidation threshold (95% LTV)Oracle shows collateral value vs. debt ratio breaching threshold.

Reading the health bar​

The colored bar in the vault UI gives an at-a-glance view of your position. Keep your current LTV well below the liquidation marker. If MYT ever records a loss, the Liq marker slides left to reflect reduced backing.

Position health
Current62%
Max90%
Liq95%
Your live leverage
Max LTV — borrowing ceiling
Liq LTV — liquidation threshold
When LTV crosses 95%
LTV exceeds 95%
Position flagged
→
Redemption check
Can early redemption restore 85%?
→
Yes — early redemption only
No — redemption + collateral used
→
Restored to 85%
Remaining position untouched

Only the minimum needed to reach 85% LTV is liquidated — the rest of your position is untouched. A liquidator fee is paid on both paths; if collateral can’t cover it, a separate fee vault (fundable by the DAO or any entity) covers the difference.

Day-to-day most users will never see a liquidation. If MYT vaults experience a loss, these mechanisms ensure losses are covered in a transparent and proportional way.

Review the MYT strategy breakdown and risk categories before choosing your LTV. The DAO sets a maximum percentage of the MYT that may be allocated to high and medium risk categories, which gives you a basis for calculating a safe LTV below the liquidation threshold.