Amply Finance
  • Introduction to Amply
    • What is Amply Finance?
    • Why Amply Finance?
    • How does Amply Finance Work?
  • Tokenomics
    • Tokenomics Details
    • preAMP Conversion Scheme
    • AMPLY Token Offering
  • Using Amply Finance
    • How to use Amply Finance
    • Supplying Tokens
    • Borrowing Assets
    • Repaying Loans
    • Withdrawing Assets
    • Claiming $AMPLY Rewards
    • Staking AMPLY
      • Withdrawing AMPLY
      • Upgrade AMPLY
      • Claim AMPLY rewards
    • Converting preAMP to AMPLY
    • Claiming vETH and vUSD Rewards
  • Efficiency Mode
    • Activating eMode
    • Using Collateral and Borrowing Tokens in eMode
    • Repaying Debt and Withdrawing Collateral in eMode
    • Deactivating eMode
  • Interest Rate Model
    • Borrow interest rate
    • Supply rate
  • Health Factor and Loan-to-Value Ratio (LTV)
  • Liquidations
    • Liquidation Simulator
  • Yield Opportunity
  • Yield Matrix
    • Using the Yield Matrix
  • Asset Listings and Risk Management
    • Asset Listing Criteria
    • Supported Assets and Parameters
  • Information
    • Smart Contract Addresses
    • Paymaster
    • Amply Finance Terminology
    • Contact Us
    • Brand Assets
    • Audits
    • Risk Disclosure
    • AMA Transcript
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  • Max LTV
  • Liquidation threshold
  • Health Factor

Health Factor and Loan-to-Value Ratio (LTV)

There are 3 types of LTV ratios on Amply:

Max LTV

Max LTV represents the maximum amount you can borrow against your collateral. For example, if vETH has a Max LTV of 80% on Amply, then you can borrow up to $0.80 for every $1 of vETH deposited as collateral.

Liquidation threshold

Liquidation threshold is the LTV at which your position becomes eligible for liquidation. For example, if vUSD’s liquidation threshold is 82%, this means that if your debt value (in USD) becomes worth 82% of your vUSD collateral, then your position will be flagged for liquidation.

Liquidation threshold is higher than max LTV to give users a buffer against getting immediately liquidated. For example, if max LTV and liquidation threshold of vUSD is 80% and 82% respectively, it means that you can borrow up to $80 for every $100 of vUSD deposited. However, should your debt increase to $82 (debt value becomes 82% of the collateral), your debt position will then be flagged for liquidation.

Health Factor

The Health Factor is used to represent the healthy status of your overall borrow positions. A Health Factor (HF) below 1 means that your debt is eligible for liquidation. Your borrowings are viable as long as you maintain HF above 1, however we highly recommend you keep it above 3 to account for potential market volatility.

HF = SUM[(collateral in USD * liquidation threshold)] / total debt in USD

Mitigating Liquidation Risk:

Monitor LTV: Regularly check your Health Factor to ensure it stays above 1 (the point of liquidation 1).

Maintain Collateral Buffer: Consider depositing more collateral than the minimum required amount to create a buffer zone against price fluctuations.

Repay Borrowings: Repaying part of your loan can help improve your Health Factor and LTV ratio.

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Last updated 9 months ago