Lending & Borrowing
understanding loan-to-value ratio
Loan-to-value (LTV) is the ratio of a borrowed amount to the collateral value used to secure it, used to gauge risk and liquidation thresholds in BTC-backed loans.
Read more
Lending & Borrowing
a loan-to-value ratio
The proportion of a loan to the collateral's value, expressed as a percentage.
a loan-to-value ratio (LTV) is the ratio of the loan amount to the BTC collateral's current value. In LTV terms used in crypto lending, lenders set a maximum LTV, shaping how much you can borrow against your BTC and how quickly liquidation could occur if prices move.
From an LTV definition perspective, higher ratios give more liquidity but raise liquidation risk. In LTV in crypto lending, terms vary by lender, chain, and collateral quality.
Options to access BTC-backed liquidity without selling:
- DeFi non-custodial loans (e.g., Aave v3, Morpho): on-chain enforcement; LTVs are protocol-defined and transparent.
- CeFi lenders: custodial loans with their own LTVs and terms; potentially higher leverage but counterparty risk.
- Sats Terminal Borrow: a multi-lender aggregator that surfaces the best LTVs, rates, and fees and facilities collateral transfer with user consent; you retain control of assets in your Privy wallet.
For emergency-liquidity contexts, comparing LTVs and terms helps you balance speed against risk.
Related Terms
Common Questions
LTV is the ratio of the loan amount to the collateral value. In crypto lending, higher LTV increases liquidity but also liquidation risk.