How Does Liquidation Occur in a Decentralized Perpetual Futures Exchange?

Liquidation is an automated process triggered by a smart contract when a user's margin ratio falls below the maintenance threshold. A decentralized "keeper" or liquidator network monitors the positions and calls the contract's liquidation function.

The contract then takes over the position, closes it, and uses the remaining collateral to cover the debt and pay a liquidation fee to the keeper.