I didn't know Binance offered such service so did some digging and found the following information:
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?
This is the formula for LTV...- 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]
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?
It depends on the crash...
- If it reaches or goes beyond the Liquidation LTV
[83%], "
it does the liquidation process automatically [no grace period]".
Useful information:
- Loan-To-Value (LTV)
- How to use “Binance Loans” Service
- Binance Loans User Manual
