# Liquidation In the event of defaults or other adverse events, the interests of senior and equity tranche liquidity providers are balanced using a predefined waterfall mechanism. This ensures that losses are allocated from the equity tranche to the senior tranche, providing a level of protection to the senior tranche liquidity providers. Furthermore the pool issuer will liquidate the pool, and the pool will terminate once the liquidation is complete, and refunds are made. Senior liquidity providers have two options: wait for the offline liquidation process to be completed and withdraw when the funds are available or apply to sell at the price set by the bid-ask system. --- # Agent Instructions: 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: ``` GET https://docs-v2.elyfi.world/risk-management/liquidation.md?ask= ``` The question should be specific, self-contained, and written in natural language. 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.