Loan-to-Value Ratios and Liquidation Thresholds
Understanding how the Loan To Value ratio (LTV) and the Liquidation Threshold work on JPEG'd is crucial for users to manage their borrowing effectively.
It is important for users to keep track of their LTV ratio and ensure it stays below the Base or Maximum Liquidation Threshold (explained below) to avoid the risk of liquidation. Additionally, utilizing JPEG Boosts can help increase the LTV ratio and provide more borrowing power.
LTV ratios are determined by governance.
LTV Ratio
The LTV ratio determines how much a user can borrow against their NFT. For example, if the Base LTV for a collection is 60%, a user can borrow up to 60% of the NFT's value.
Base LTV
Each NFT collection on JPEG'd has a respective Base LTV, which represents the percentage of the NFT's value that can be borrowed against.
LTV Boost
It is possible to get up to 10% more LTV by either locking JPGD or staking a JPEG'd Cig Card. Leran more about JPEG Boosts.
Liquidation Threshold
Liquidation Thresholds are set at 10% above the Base LTV and Max Boosted LTV of each collection.
If the value of the NFT drops and the positions LTV ratio reaches the Base Liquidation Threshold or the Max Liquidation Threshold, the NFT will be liquidated to cover the debt. Liquidation occurs at 10% beyond the Base LTV ratio up to the Max Liquidation Threshold if boost are applied. Liquidations can be mitigated by using JPEG'd's unique insurance option.
Examples:
If a user borrows against a Cryptopunk without boosts enabled, and the Base LTV is 60% of the floor's value - liquidation would occur if the LTV reaches 70% (Base Liquidation Threshold).
If a user borrows against a Cryptopunk with the maximum boost amount enabled (+10%), and the Max Boosted LTV is 70% of the floor's value - liquidation would occur if the LTV reaches 80% (Max Liquidation Threshold).
Parameters for Each Supported Collection
| Collection | Base LTV | Liquidation Threshold |
|---|---|---|
Cryptopunks | 60% | 70% |
BAYC | 60% | 70% |
MAYC | 50% | 60% |
BAKC | 40% | 50% |
Meebits | 40% | 50% |
Pudgy Penguins | 50% | 60% |
Milady | 50% | 60% |
Doodles | 40% | 50% |
Azuki | 50% | 60% |
Clonex | 40% | 50% |
Autogylphs | 40% | 50% |
Fidenza | 40% | 50% |
Ringers | 40% | 50% |
Chromie Squiggles | 40% | 50% |
Otherdeeds | 40% | 50% |
Etherocks | 40% | 50% |
Monitoring your Position
LTV ratio per position can be monitored on the Dashboard/Borrows section. The health bar shows the current distance to liquidation of the position, while the Floor Liquidation Price shows you at which floor price for the collection you would be liquidated.
Additionally, users can make use of our Telegram notification bot here to receive live updates on their position, and read the Guide to Vault Management here.
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