Bitcoin Forum

Hi,

I am looking to take a loan on biance, but I am a little confused about certain concepts!

Could someone please walk me through an example:

Loan Amount: 10,000 USD
Collateral: 1.7 Bitcoin

Now it's where I am getting confused.

Margin Call: 75%
Liquidation LTV: 83%

How do I calculate the margin call and the LTV in this example? What are the values than?

What happens if bitcoin crashes? Do I get automatically liquidated or is there a certain time frame I can top up? I am not permanently at my computer if I am taking a loan for 90 days for example. Is there a grace period to top up?

Thanks a lot!

I didn't know Binance offered such service so did some digging and found the following information:

This is the formula for LTV... (https://archive.fo/VPRA1#selection-1353.0-1389.104)

• 10,000 $ /1.7 BTC ^{[16,180 $ = current preev rate]} x 100%
  = 61.80%

And this is how you can calculate for other values in margin call and liquidation percentages:

• For 75% use 10,000 $ / 0.75 = 13,333 $ ^{[1.402 BTC = current preev rate]}
• For 83% use 10,000 $ / 0.83 = 12,048 $ ^{[1.270 BTC = current preev rate]}

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It depends on the crash...
- If it reaches or goes beyond the Liquidation LTV ^[83%], "it does the liquidation process automatically ^{[no grace period]} (https://archive.fo/VPRA1#selection-1401.365-1401.483)".

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Useful information:

<sup>- Loan-To-Value (LTV) (https://www.binance.com/en/support/faq/360040490772)
- How to use “Binance Loans” Service (https://www.binance.com/en/support/faq/360041277432)
- Binance Loans User Manual (https://www.binance.com/en/support/faq/360041278132)</sup>