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Hope you and everyone is doing well during this bear time.
Sorry for the delayed response; somehow I didn't get notification when you commented. Gotta double-check my settings.
First of all, thank you for taking the time to leave a reply. Let me share some additional insight in the hope of adding more value to the crypto community in general. The collateral value rate will be used to compare its value to the total amount owed on loan. And there will be two cases:
1. In bull market case: If the value of BTC increases, then the borrower is in a better position since they can repay the loan with less Bitcoin. Borrower can only recall excess early anytime, no need to wait till the term end. We let borrower withdraw excess collateral so they can use as much of your funds as possible.
2. In bear market case: We have protection measures for rapid price drops such as auto top-up. Real-time alert oracle via email to protect your. We have three margin call thresholds 87% LTV, 83% LTV, 80% LTV. We pay a lot attention to these notices and features to take best market price and avoid liquidation for crypto investors as much as possible.
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Best peer-to-peer lending site for borrowers of September 2022
How MyConstant crypto loans work
MyConstant lender offers crypto loans backed by either a single-currency or a multicrypto portfolio.
It doesn’t advertise limits on how much you can borrow, but you’ll need to take out multiple loans to borrow more than $50,000. The required loan-to-value (LTV) ratio to get a loan is 66%, which is lower than similar lenders. For example, to get a $50,000 loan with MyConstant, you’d have to pledge the equivalent of $75,757 in crypto to back it up — not $100,000 in crypto required for an LTV of 50%.
MyConstant advertises as soon as it receives your collateral, it deposits funds into your MyConstant account. Once funded, you can either withdraw your loan as US dollars to your bank account for free or withdraw it as a stablecoin to your wallet address for a fee.
What happens if my crypto drops in value?
If the value of your crypto significantly decreases, MyConstant asks you to add more collateral to your loan to bring the LTV to an acceptable level.
This is what most lenders refer to as a margin call. Margin calls happen when the LTV reaches a specific threshold.
MyConstant‘s has three margin call thresholds:
◉ 87% LTV
◉ 83% LTV
◉ 80% LTV
If your account reaches 90.9% LTV either due to inaction or a “flash crash” in value, your collateral is automatically liquidated. You get to keep the loan, but you will lose your crypto.
Pay attention to these notices and take corrective action by either paying off the loan or adding more collateral to bring the LTV down to avoid liquidation.