YIELDS & RETURNS
LTV (Loan-to-Value Ratio)
Definition
LTV ratio represents the percentage of collateral value that can be borrowed. A lower LTV means more conservative lending, while higher LTV increases liquidation risk.
Example
Example
With 75% LTV, you can borrow up to $750 against $1000 of collateral.
Risks to Consider
Risks
- Liquidation risk
- Market volatility
- Sudden LTV changes
