Adequacy Ratio
A metric used to assess the health and safety of a user's collateralized position.
Last updated
A metric used to assess the health and safety of a user's collateralized position.
Last updated
At Unitus, we consider the Adequacy Ratio as the liquidation threshold. You should always keep watch on your Adequacy Ratio and keep it above 1. Allowing your debt position to fall below 1 will result in a portion of your collateral being liquidated at a discount. This mechanism helps protect lenders from financial losses.
ใAmountใ_col : supplied asset amount as collateral
ใPriceใ_col : collateral asset price in USD
ใLTVใ_col : collateral asset loan to value, in range [0,1}
ใAmountใ_loan : borrowed asset amount
ใPriceใ_loan : borrowed asset price in USD
ใBorrowFactorใ_loan : borrowed asset borrow factor, in range {0,1]
