LTV (Loan-to-Value) is the ratio between the value of your Credit Line and the value of your collateral. It shows how much you’ve borrowed compared to the crypto you’ve deposited as security.
For example, if you deposit $10,000 worth of crypto and borrow $5,000, your LTV is 50%.
The LTV is an important indicator of risk:
A lower LTV means your position is safer because you have more collateral supporting your Credit Line .
A higher LTV increases the risk of liquidation if the market price of your collateral falls.
Interest rates are also linked to your LTV. The higher your LTV, the higher your interest rate — since the risk for the lender grows.
You can always manage your LTV by adding more collateral or partially repaying the loan to keep your position safe.