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Borrowing Parameters

Each asset in a lending market defines two key parameters that determine how much can be borrowed and when a position becomes unsafe:

  • Maximum Loan-to-Value (mLTV) — borrowing limit
  • Liquidation Threshold (LT) — solvency limit

These parameters control both borrowing power and Health Factor within the market.

In this example, the collateral asset siUSD has a Max LTV of 92% and an LT of 94%. This means a user can borrow 92% of their siUSD deposit, and they might experience partial liquidation if the loan value exceeds 94% of their collateral value.

Collateral Factors

Maximum Loan-to-Value (mLTV)​

The Max LTV defines the maximum amount a user can borrow against their collateral and is calculated as follows:

LTV=Loanvalue,currentCollateralvalue,currentLTV = \frac{Loan_{value,current}}{Collateral_{value,current}}

For example:

An mLTV of 92% means you can borrow up to 0.95per0.95 per 1.00 of collateral

If your position reaches this limit:

  • You cannot borrow more
  • You must add collateral or repay debt to increase borrowing capacity

Max LTV is a hard cap on leverage.

Liquidation Threshold (LT)​

The Liquidation Threshold (LT) defines when a position becomes eligible for liquidation.

For example:

An LT of 94% means your position may be liquidated if your LTV exceeds 94%

Between mLTV and LT:

  • You are allowed to borrow
  • But your position is increasingly at risk

Once LT is exceeded:

Liquidation mechanisms are triggered