High Risk Loans (USD)

Overview

This indicator shows the value of loans that are collateralized against volatile assets that are within 1% of their liquidation threshold. This information is useful to help users understand the protocol and its exposure to high risk loans. Furthermore it helps liquidators to anticipate future liquidations.

How can I use it?

Classifying loans within a 1% liquidation ratio (the ratio of the collateral to the loan value) can provide useful information for understanding the risk associated with a loan in a decentralized finance (DeFi) protocol.

A loan within just 1% of liquidation is considered to be highly risky, as there is a higher likelihood that the loan will be liquidated if the value of the collateral decreases or the loan asset increases in price.

By identifying loans with a liquidation ratio below 1%, investors and users can better understand the level of risk associated, which can help make informed decisions on whether to invest or use the protocol. Additionally, this information can be useful for the DeFi protocol itself to properly manage risk, by adjusting liquidation thresholds or their respective liquidation bonus.

Overall, classifying loans based on their liquidation ratio provides valuable information for understanding the risk associated with each loan and helps ensure the stability and security of the DeFi protocol.