Collateral liquidation occurs when your Loan-to-Value (LTV) reaches a critical threshold, known as the Liquidation LTV.
What’s the Threshold?
Your Liquidation LTV is specified in your loan agreement. Currently, it is set at 90%.
Example:
-
Loan Amount: $50,000 USD
-
Original Collateral Value: $100,000 USD
-
Origination LTV: 50%
-
Liquidation LTV: 90%
If your collateral drops to $55,555, your LTV reaches 90%, and our system will automatically sell a portion of your crypto to bring your loan back to its original LTV.
How to Avoid Liquidation:
Monitor your LTV regularly and top up your collateral or repay part of your loan when your LTV approaches 80% (Margin Call level).
Comments
0 comments
Please sign in to leave a comment.