Liquidation Response

Borrowing is general has always been risky. Borrowing on Anchor also has it's risks. There are smart contract risks where the protocol can be hacked and funds on it can be siphoned out. There's also risk of liquidation specifically when borrowing. To borrow on Anchor, one must put some collateral in PoS assets such as $LUNA or $ETH (and more assets coming soon) and then you only will be able to borrow $UST max 50% worth of the provided collateral. Liquidation happens when the value of your collateral drops and causing your borrowing to go to more than 60% of collateral value. When this happens, your collateral will then be auctioned to bidders. Then you will lose all your collateral assets because you did not repay your loan. This is the TLDR version on how liquidation happens, for more info you will have to refer the Anchor docs.