# External Liquidation Gateways

External Liquidation Gateways are third-party protocols that support Unlockd's [Liquidation Process](/protocol-mechanics/liquidations/liquidation-process.md).

They allow for the liquidation of assets instantly, at a fixed price stipulated by them or the market.

Currently, Unlockd supports one protocol for liquidations: Reservoir. If the Unlockd auction process results in no bids, the unhealthy position will be liquidated in one of their supported marketplaces.

* **The collateral will be sold to the highest bid in Reservoir.**
* **Which assets are liquidated will depend on the Smart Liquidation Algorithm.**

{% hint style="info" %}
In case the liquidation results in a profit for Unlockd (i.e. the price obtained in the external protocol is greater than the position's debt), the difference between the sell price and the debt will be returned to the borrower.
{% endhint %}

## Reservoir

Reservoir is open infrastructure for trading assets across major marketplaces and chains.

Reservoir treats the NFT and RWA market as one cohesive whole and abstracts the process of interacting with individual orderbooks and exchanges. This means Unlockd gets:

* **Upgrade protection** - Since Reservoir abstracts the orderbook and exchange, Unlockd gets exchange and orderbook upgrades free and with no additional work. By default Reservoir uses the Seaport exchange, as new features roll out, Unlockd will get them without any changes to our code.
* **Out of the box aggregation** - Reservoir aggregates all major marketplaces and normalize the liquidity so all orders are treated equally in their system. Reservoir does not just aggregate listings, they also aggregate all bid liquidity from across the NFT and RWA ecosystem so the Unlockd protocol can sell the liquidated collateral asset instantly into the best available offer.
* **Order distribution** - Reservoir allows Unlockd to post our own orders with our desired fee structure. These orders are distributed to all Reservoir partner marketplaces and marketplaces that aggregate the Reservoir orderbook. Additionally, Reservoir allows Unlockd to cross post orders to other major marketplace orderbooks.

Unlockd uses Reservoir's universal router for creating and executing NFT and RWA liquidity across major marketplaces and within the Reservoir ecosystem.

Reservoir provides Unlockd with a modular set of tools that let us to interact with the NFT and RWA market at the appropriate level of abstraction for our application, enabling seamless liquidation options in the following marketplaces:

1. opensea.io
2. looksrare.org
3. x2y2.io
4. sudoswap.xyz
5. nft.coinbase.com
6. rarible.com
7. nftx.io
8. foundation.app
9. manifold.xyz
10. zora.co
11. blur.io
12. cryptopunks.app
13. element.market
14. infinity.xyz
15. universe.xyz
16. sansa.xyz
17. ens.vision
18. magically.gg
19. alienswap.xyz
20. sound.xyz
21. atomic0.com
22. rare.id
23. parcel.so
24. metahood.xyz
25. reservoir.market
26. tessera.co

## Alternative ELGs

In extremely rare cases where auctions and Reservoir fail to cover the Critical Recovery Threshold, Unlockd may resort to alternative liquidation methods. This could include re-launching auctions, engaging in Over-The-Counter (OTC) deals, or other potential options, ensuring all avenues are explored for effective debt recovery and avoiding protocol's bad debt.


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