The purpose of liquidations is to ensure that the circulating supply of ZUSD is always sufficiently collateralized. Should a Bank’s BankValue drop beneath the MCR, and the liquidation parameter has been met, the Bank will be liquidated. There are 3 sequential fail safes for the liquidation process: 1) Liquidating to the Reserve Fund, 2) Collateral Auctions, and 3) Slash Auctions.