What is loan-to-value (LTV)?
Loan-to-value is set at 50% or 70%. That means that we give you 50% or 70% of the collateral value as a loan. This allows us to minimize your risk and protects you from severe volatility in the price of your collateral.
If your collateral is 1 BTC and it costs $60,000, you will get $30,000 in USDT. Why only 50%? At the 50% LTV, we guarantee we don’t sell your collateral before its price drops by 50%. However, if our LTV were 90%, we would give you a $54k loan for your $60k. But if the Bitcoin price dropped to $54k, we’d sell it. This would be not beneficial for you. That is why low LTV secures your collateral from liquidation.