Loan-to-Value (LTV) ratio is a key indicator for evaluating the risk level of your borrowed assets.

Bybit assesses risk by using the following three LTV ratios:

 

• Initial LTV: The Initial LTV ratio determines the first amount of coins that can be borrowed. It’s worth noting that the initial LTV ratio may vary for different collateral, which means that the initial amount of borrowable coins will also be different.

 

• Margin Call LTV: When the LTV ratio is higher than the Margin Call LTV ratio, you’ll receive a notification via email, SMS and a Push to remind you to deposit or transfer more collateral to your Spot Account, or repay the borrowed coins to lower your LTV ratio.

 Note: It is strongly recommended for users to continue monitoring their account in case of risk alert delay or glitch. Bybit will not be held responsible for liquidations resulting directly or indirectly from this alert feature’s malfunction. 

 

• Liquidation LTV: When the LTV ratio is higher than the Liquidation LTV ratio, Bybit will liquidate your collateral assets to repay your loan and interest in full. Please note that liquidation will be triggered when the corresponding Liquidation LTV ratio is reached.

 

 

 

Formula

LTV = Loan Amount/ Collateral Amount

Loan Amount = ∑ (Outstanding Principal + Outstanding Interest + Outstanding Overdue Interest)

 

Notes:

— Initial LTV and Margin Call LTV: The loan and collateral value are calculated based on the Last Traded Price on Bybit.

— Liquidation LTV: The loan and collateral value are calculated by taking the smaller value of the Last Traded Price and the Index Price on Bybit.

 

 

 

You can view the LTV ratios, Interest Rate and Liquidation Price on the right side of the Borrow page.

 

 

 

 

Liquidation Price

The liquidation price is the price level at which liquidation is determined. When the Last Traded Price and Index Price reach the liquidation price, Bybit will liquidate your collateral assets to repay your loan and interest in full. Please note that liquidation will be triggered when the corresponding Liquidation LTV ratio is reached.

 

Formula

Liquidation Price = (Outstanding Principal + Outstanding Interest + Outstanding Overdue Interest) / (Collateral Quantity × Liquidation LTV)

 

Liquidation Fee: In the event of a liquidation, you will be charged 2% of the value of the loaned asset as a liquidation fee, and it will be contributed to the Margin Insurance Fund. This fee will be calculated at the Last Traded Price and deducted from your collateral.

 

Outstanding Balance: After Bybit liquidates your collateral assets to repay your loan and interest, if there are still outstanding balances, the system will use the Margin Insurance Fund to repay the outstanding balances. The insurance fund is designed to cover the losses caused by insufficient collateral assets to repay the loan and interest when the user's position is liquidated.

 

Example

Suppose the parameters of a Crypto Loans order initiated by Trader A are as follows:

 

Collateral Asset: ETH

Borrowable Asset: USDT

Outstanding Principal: 1,000 USDT

Outstanding Interest: 10 USDT

Outstanding Overdue Interest: 0 USDT

Collateral Quantity: 2 ETH

Liquidation LTV: 85%

 

Formula

Liquidation Price = (Outstanding Principal + Outstanding Interest + Outstanding Overdue Interest) / (Collateral Quantity × Liquidation LTV)

 

In this case, the liquidation price is 594.117647 USDT, based on the following calculation:

(1,000 + 10) / (2 × 0.85)

 

Note: The liquidation price displayed on the Borrow page of Crypto Loans is for reference and may be different from the actual liquidation price. The actual liquidation price may be affected by factors such as market fluctuations and the user's collateral assets may suffer certain losses as a result.

 

 

 

 

 

How to Adjust the LTV Ratio

Step 1: Click on My Borrowings to enter the order page, and tap on Adjust Collateral Amount.

 

 

Alternatively, click on Orders → Loan Order in the upper right corner of the page, then select Borrowing Account → Borrowings & Repayments → Outstanding. Click on Adjust Collateral Amount in the column where you want to adjust.

 

 

 

 

 

 

Step 2: Enter the amount of collateral you want to add, or click on All. Please make sure all of your information is correct, then click on Yes.

 

 

Congratulations! You have successfully adjusted the LTV ratio.

 

 

You can view your change in LTV ratio from the LTV Adjustment History → Collateral Amount Adjustment History.