What it means
How much you can borrow against your collateral, as a share of its value.
An LTV of 75% means €1,000 of collateral lets you borrow up to €750. Past a higher limit, the liquidation threshold, the loan can be liquidated.
How it works
Safer collateral gets a higher LTV.
Related terms
| Term | What it means |
|---|---|
| Collateral | What a borrower deposits to secure a loan, which the protocol can sell if the loan isn't safe any more. |
| Liquidation | When a lending protocol sells a borrower's collateral because its value has fallen too close to the loan. |
| Health factor | A number that shows how safe a loan is: above 1 it's safe, at 1 or below it can be liquidated. |
This glossary explains terms in general. It isn't investment, tax or legal advice.