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<p>The liquidation risk of a lending agreement depends on three parameters: LTV, liquidation threshold, and liquidation penalty. LTV represents the maximum amount you can borrow; the liquidation threshold is the point at which liquidation occurs, with the difference between them serving as a buffer; the penalty is the additional loss incurred upon liquidation. The greater the volatility of the collateral, the wider the buffer should be. Repeated borrowing effectively reduces this buffer. This is not investment advice.</p>

The liquidation risk of a lending agreement depends on three parameters: LTV, liquidation threshold, and liquidation penalty. LTV represents the maximum amount you can borrow; the liquidation threshold is the point at which liquidation occurs, with the difference between them serving as a buffer; the penalty is the additional loss incurred upon liquidation. The greater the volatility of the collateral, the wider the buffer should be. Repeated borrowing effectively reduces this buffer. This is no

The liquidation risk of a lending agreement depends on three parameters: LTV, liquidation threshold, and liquidation penalty. LTV represents the maximum amount you can borrow; the liquidation threshold is the point at which liquidation occurs, with the difference between them serving as a buffer; the penalty is the additional loss incurred upon liquidation. The greater the volatility of the collateral, the wider the buffer should be. Repeated borrowing effectively reduces this buffer. This is not investment advice.

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