Levvy@levvyfinance
Good Morning, Levvy Fam
Understanding Loan-to-Value (LTV) ratios is one of the most important parts of lending safely and getting the most out of your assets. Let’s break it down 👇
What is LTV?
LTV = (Loan Amount ÷ Value of Collateral) × 100
It tells you how much of your collateral is being borrowed against, and how much “buffer” is left to protect the lender.
Example 1:
Loan: 5,000 ADA
Collateral: 10,000 ADA
LTV = 50% ✅
The borrower is overcollateralized, safer for the lender.
Example 2:
Loan: 5,000 ADA
Collateral: 6,000 ADA
LTV = 83.3% ⚠️
The margin of safety is thinner, making it riskier for the lender.
Low vs. High LTV
Low LTV → Safer for lenders, but borrowers must lock up more collateral. This is why Levvy has the highest APY's on Cardano for Lenders.
High LTV → Better for borrowers, but lenders take on more risk due to market volatility. This is why Borrowers like to use Levvy, they get more for less.
Why do LTVs Change?
Collateral values fluctuate as markets move. Meme tokens like $SNEK or $ANGELS may require lower LTVs due to volatility, while assets with steadier price action may support higher LTVs.
Always DYOR
Lending and borrowing in crypto carries risk, and markets can swing wildly in 7–14 days, so setting your LTV at a price you’d be comfortable owning the collateral is one of the smartest ways to protect yourself.
Happy Lending and Borrowing!🦥