#termmax @TermMax
I used to think MLTV and LLTV were basically the same thing. Just another pair of numbers showing how much you could borrow against your collateral.
Then I started looking closer at @TermMax and the difference actually became pretty important.
LLTV is basically the upper borrowing limit against your collateral. It tells you how far a position can go before liquidation becomes the real concern.
MLTV is more about the margin where things start getting uncomfortable. It gives the position some room before you hit that final limit.
What I like about this is that the two numbers make the risk easier to understand. You’re not just looking at one ratio and hoping the market behaves. You can see where the position is operating and where the hard limit sits.
That made me look at leveraged positions differently. The question isn’t only “how much can I borrow?” It’s also “how much room do I actually have before this position gets stressed?”
For fixed-rate DeFi, that distinction matters a lot more than I first thought.
#TermMax $CLO $TUT boom fire 🔥
I used to think MLTV and LLTV were basically the same thing. Just another pair of numbers showing how much you could borrow against your collateral.
Then I started looking closer at @TermMax and the difference actually became pretty important.
LLTV is basically the upper borrowing limit against your collateral. It tells you how far a position can go before liquidation becomes the real concern.
MLTV is more about the margin where things start getting uncomfortable. It gives the position some room before you hit that final limit.
What I like about this is that the two numbers make the risk easier to understand. You’re not just looking at one ratio and hoping the market behaves. You can see where the position is operating and where the hard limit sits.
That made me look at leveraged positions differently. The question isn’t only “how much can I borrow?” It’s also “how much room do I actually have before this position gets stressed?”
For fixed-rate DeFi, that distinction matters a lot more than I first thought.
#TermMax $CLO $TUT boom fire 🔥