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What is Loan-to-Value (LTV)?
What is Loan-to-Value (LTV)? Exchange Lending - General

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Written by Valery
Updated over a week ago

What is LTV?

LTV is the ratio of your loan to the value of your Collateral.

When you borrow a loan, we calculate your loan amount or required Collateral based on the following formula.

LTV = (Market Value of Loan Amount) ÷ (Market Value of Collateral)

When a loan becomes active, we monitor your loan’s LTV based on the following formula.

LTV = (Market Value of Outstanding Balance) ÷ (Market Value of Collateral)

where, Outstanding Balance = Outstanding Loan Principal + Outstanding Loan Interest

A composite index price is used to calculate the LTV every 5 seconds, which incorporates price data from the following major exchanges with the corresponding weightage:

  • Kraken, 20%;

  • Bittrex, 20%;

  • Huobi, 20%;

  • Binance, 20%;

  •, 20%.

Based on the price data from these exchanges, we determine the composite index price and use this to value your crypto assets for LTV calculation. USDT is regarded as the ‘Home Currency’ for all crypto asset valuations.

As a fallback, these actions will be used to determine a fair, weighted price:

  • If a constituent exchange is unresponsive, the most recently available price will be used.

  • If a constituent exchange is unresponsive for 15 minutes, the constituent will be removed from the index until it is operational.

  • If a constituent’s price differs from the median constituent price for that index by 5% or more, it will be excluded from the index calculation. The constituent’s price will be included in the index price again when it differs from the median by less than 5%.

In rare cases, we will not use this methodology to value your crypto assets. Such instances will only occur when the value of the crypto asset is different from the price listed on the Exchange.

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