Interest rate
The platform uses an annual interest rate, shown as APR (e.g. 10% APR). Interest compounds continuously over time on your principal, so the amount you owe grows as principal plus accrued interest. Your total debt (used for LTV and liquidation checks) is principal plus this accrued interest.
The rate is set by the platform (currently 10% per year). Because interest compounds, the effective growth of your debt follows continuous compounding at the stated APR.
LTV and health factor
LTV (loan-to-value) is your total debt in fUSD divided by the USD value of your collateral:
LTV = total debt (fUSD) / collateral value (USD)
A lower LTV means your collateral is worth more relative to your debt, so you have more margin before liquidation. The platform uses a health factor for display; when your LTV goes above 50%, you enter the liquidation zone and grace periods apply (see below).
For account safety we recommend always keeping your LTV below 40%.
When liquidations occur
Liquidation can occur when your LTV is above 50%. The rules are tiered:
- 50%–60% LTV: Liquidation can occur within 3 days if your LTV stays in this range.
- 60%–65% LTV: Liquidation can occur within 6 hours.
- Above 65% LTV: Liquidation can occur immediately.
The liquidation price shown on the Borrow page is the collateral price at which your LTV would reach 50% (the start of the liquidation zone). If the market price of your collateral falls, your LTV rises; if it reaches these tiers, the grace periods or immediate liquidation apply.
You can avoid liquidation by repaying some debt, adding more collateral, or closing the loan before your LTV enters or remains in these zones.
What happens when liquidated
When your LTV is in the liquidation zone (above 50%) and the applicable grace period has passed—or when it exceeds 65%—the protocol can liquidate your position. Collateral may be seized to cover the outstanding debt. The system marks such loans as liquidatable and notifies users so they are aware of the status.
To understand the full borrow flow and how to stay safe, see How it works.