# Vault Protocol Fluid’s Vault Protocol is a **CDP-based borrowing system** (similar to Maker DAO) that enables **up to 95% LTV** and supports single collateral-single debt positions. ### Liquidations on Fluid Vaults on Fluid operate differently than in traditional protocols, where collateral is composed of two interchangeable assets (e.g., WBTC and cbBTC) and can be pooled together to earn trading fees. Works also for dual asset debt (e.g. USDC and USDT). * Smart Collateral/Normal Debt: WBTC - cbBTC / USDC or weETH - ETH / wstETH * Normal Collateral/Smart Debt: ETH / USDC - USDT or wstETH / USDC - USDT * Smart Collateral/Smart Debt: WBTC - cbBTC / WBTC - cbBTC or wstETH - ETH / wstETH - ETH Fluid employs a **slot-based liquidation system**, where when a user opens a Vault, their LTV is assigned to a specific slot. Positions **within the same LTV** are grouped into slots, which allows simultaneous liquidations, making the process faster and more gas-efficient. After a liquidation event, the remaining positions are moved to the next slot based on the new market price. The protocol only **liquidates a portion of the position** necessary to bring the position back to a healthy ratio, which reduces market impact and potential cascading liquidations. Liquidation penalty in Fluid can be as low as 0.1% (up to 3%), while on other protocols it generally ranges from 5-10%. **Trader-as-Liquidator** (by integrating with the DEX aggregators) allows any trader to participate in the liquidation process, ensuring liquidity and enhancing efficiency. * When a liquidation occurs, the liquidatable collateral is available for traders (that execute regular swaps through DEX aggregators) to swap for a discounted value while indirectly liquidating high LTV positions. *** ## Related Articles: * [Fluid](https://help.defisaver.com/protocols/fluid) * [Dashboard & Use-case](https://help.defisaver.com/protocols/fluid/dashboard-and-use-case) * [Lend Protocol](https://help.defisaver.com/protocols/fluid/lend-protocol) * [DEX Protocol](https://help.defisaver.com/protocols/fluid/dex-protocol) --- # 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://help.defisaver.com/protocols/fluid/vault-protocol.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.