In a liquidation, up to 50% of a borrower's debt is repaid and that value + liquidation fee is taken from the collateral available, so after a liquidation that amount liquidated from your debt is repaid.
Mantle charges an interest rate for borrowing assets. The borrow APY is set algorithmically, a function of utilization of the pool.
Mantle Finance is a NFT loan listings market place, where users can unlock the liquidity of their NFT assets.
In the Marketplace, you can be
A Lender: Lend your crypto assets(ERC-20) to NFT holders and get good loan interest. The loan terms are offered by you. This loan is backed by an NFT and escrow in Mantle's Smart Contract.
A Borrower: list your NFT as loan collateral and get liquidity without having to sell or fractionalize your NFT.
The overall operation mode of P2P Lending is very similar to a pawnshop. The NFT in the collateral will be kept in the smart contract. Once Borrower does not repay the loan, the NFT could be taken away by Lender.