Short answer: Liquidation is the protocol's response when your loan is undercollateralized (collateral value no longer safely covers the debt). Vesu can sell some or all of your WBTC collateral to repay the loan. You keep any leftover collateral after the close. You do not keep an unpaid undercollateralized loan.
How liquidation works
- You borrowed stables against WBTC on Vesu (via Xverse Borrow).
- BTC price falls (or you borrow more), so collateral cover worsens.
- When the position is undercollateralized per Vesu's rules, liquidators or the protocol close the unsafe position.
- Collateral is sold (or seized per protocol rules) to cover debt and any protocol costs.
- Remaining collateral (if any) returns to you. The loan is closed or reduced to a healthy state.
Exact steps, costs, and residual rules are protocol-specific. Read the confirm screen and Vesu / in-app risk details for your market.
What you can lose
| You may lose | You typically do not "owe" afterward |
|---|---|
| Part or all of the WBTC collateral needed to cover the debt plus protocol costs | An open undercollateralized loan sitting unpaid (the protocol closes it using collateral) |
| Any liquidation cost the market charges (see Vesu / in-app) | Guaranteed recovery of the full original BTC stack |
Liquidation can recreate the sale of Bitcoin you opened the loan to avoid. Size loans conservatively and leave a buffer under max borrow.
What Support cannot reverse
- Onchain liquidations are final once executed.
- Xverse Support cannot undo a Vesu liquidation or restore sold collateral.
- Keep your seed and device secure. Losing keys does not pause liquidation math.
How to avoid liquidation
- Borrow less than the max the UI allows (leave a buffer).
- Watch BTC price and your health / risk indicator after large moves.
- Repay early when risk rises.
- Add WBTC collateral when you still can.
- Do not treat supply yield on collateral as a hedge against a sharp BTC drop.
See also: What is a loan-to-value ratio and what happens if Bitcoin's price drops?
Zest Borrow is Discovery only. It is not the live market this article describes.
If you were liquidated
- Open the Borrow / Earn position view and confirm the loan is closed or reduced.
- Check remaining WBTC (or other) balance on Starknet.
- Note the event for your own records (tax or personal accounting, not advice).
- Contact Support only for app display issues (position not refreshing), not to reverse the onchain settlement.