If the BTC/USD price drops drastically, an none of the incentive mechanisms along the coverage dropping prevents it to cross the liquidation threshold (currently: coverage < 1.04) the system will enter the liquidation state and the liquidation function will be available to be executed. Although there is an specific method to evaluate liquidation (
evalLiquidation), to guarantee this process is executed, the same logic is evaluated and, if needed, executed in every MoC state changing method. For example, mintDocVendors, redeemBProVendors, etc or even settlement itself; every that has the
transitionState modifier actually. Liquidation process will invalidate the BitPro Token (it cannot be transfer any more) as a precaution measure as it has no more RBTC backing it, it has no value. Users can redeem all of their DoCs at once, valued at the liquidation price.