@ursa345
A project’s Loan-to-Value (LTV) ratio is critical for assessing the health of lending platforms. A healthy LTV ensures users are not over-leveraged, reducing the risk of liquidation cascades during market volatility. If LTV ratios are too high, sudden price drops can trigger massive forced liquidations, harming both users and the protocol. Projects should maintain conservative collateral requirements and offer clear guidelines for borrowers. Dynamic risk management, such as adjusting LTV limits based on asset volatility, adds further protection. Transparent reporting of LTV data helps users make informed decisions and promotes trust in the platform’s overall stability.
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