LTV Monitoring & Liquidation Thresholds

LTV Monitoring

Loan-to-Value (LTV) ratio is the most important metric for crypto-backed loans. It measures how much you owe relative to your collateral value.

LTV Formula

LTV = (Loan Amount / Collateral Value) x 100%

Example: You borrow $1,000 USDT against $2,000 worth of ETH collateral. Your LTV is 50%.

Monitoring Thresholds

| LTV Range | Status | Action |

|-----------|--------|--------|

| Below 80% | Healthy | No action needed |

| 80% | Warning | Consider adding collateral |

| 90% | Urgent | Add collateral or repay immediately |

| 95% | Liquidation | Collateral may be sold automatically |

How Monitoring Works

• The platform checks all active loans every 60 seconds
• Collateral values are updated using real-time market prices
• Notifications are sent at each threshold (80%, 90%, 95%)
• You can set custom quiet hours to avoid alerts during sleep

What Happens at Liquidation (95% LTV)

1. The platform marks the loan as "LIQUIDATING"
2. Collateral is sold at market price to repay the lender
3. Any remaining collateral is returned to the borrower
4. Both parties are notified of the liquidation

How to Avoid Liquidation

• Add collateral: Send more crypto to reduce your LTV
• Partial repayment: Repay part of the loan to lower the ratio
• Choose stable collateral: Less volatile assets reduce liquidation risk
• Set conservative LTV: Borrow less relative to your collateral