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 Funding Account or Unified Trading 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.
- Delayed Liquidation LTV：When the Delayed Liquidation LTV threshold is reached, liquidation will not occur immediately. Instead, a 24-hour grace period will be provided, during which you can add collateral or partially repay your loan to reduce your LTV back to the Initial LTV level. If your LTV remains at or above the delayed liquidation LTV level throughout the grace period, or if it exceeds the Liquidation LTV at any point, immediate liquidation will be triggered.
- 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, Margin Call LTV and Liquidation LTV: The loan and collateral values (with the collateral ratio applied) are calculated based on the Index Price of the respective asset on Bybit.
You can view the LTV ratios on the upper right side of the Crypto Loan page.
Liquidation Price
The liquidation price is the price level at which liquidation is determined. When the 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 Index Price and deducted from your collateral. If your collateral is converted to repay the loan, a repayment fee will be applied. The fee rate is the higher between the repayment fee rates for the collateral asset and the debt asset.
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: 95%
Formula
Liquidation Price = (Outstanding Principal + Outstanding Interest + Outstanding Overdue Interest) / (Collateral Quantity × Liquidation LTV)
In this case, the liquidation price is 531.579 USDT, based on the following calculation:
(1,000 + 10) / (2 × 0.95)
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 Adjust under the Collateral tab on the Crypto Loan page.
Step 2: Adjust the collateral amount, and you will see the LTV change under LTV After Adjustment.
Alternatively, click on Assets → Crypto Loans in the upper right corner of the page. Under the Crypto Loans tab, click on Adjust Collateral Amount in the column where you want to adjust.
Step 3: 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 Liabilities — Flexible/Fixed History → Collateral Adjustment History.
