Risk & Security
Liquidation Threshold
The LTV ratio at which a lending protocol will begin liquidating a borrower's collateral. For example, if the liquidation threshold is 80%, your collateral will be sold if your debt reaches 80% of its value.
Why Liquidation Threshold Matters
Understanding liquidation threshold is essential for anyone participating in crypto lending or DeFi markets. This concept directly impacts how you evaluate platforms, manage risk, and optimize returns.
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