Crypto Loan Collateral Calculator

How to read the outputs

• Required collateral is the starting market value needed to hit your target LTV.
• Overcollateralization shows how much buffer you have versus the debt principal.
• Buffer to liquidation is the percentage drop in collateral value that would push LTV to the liquidation threshold.
• When you provide a collateral price, the tool shows units required and the implied liquidation price.

Assumptions & quick notes

• LTV uses current market value of collateral; no interest accrual or fees are modeled.
• If your platform charges origination or borrow interest, add that to the loan amount for a tighter buffer.
• Liquidation thresholds vary by asset and venue; use the exact figure from your protocol or lender.
• Results are educational only. Crypto loans can be volatile—maintain breathing room below liquidation.

Education: How crypto collateralization really works

In a crypto-backed loan, the lender or smart contract looks at a simple ratio: loan amount divided by collateral market value (LTV). Your deposit must stay above the platform’s minimum collateral requirement and below the liquidation LTV. If LTV rises because price falls, the position becomes risky. This calculator shows the upfront collateral value needed for your target LTV, plus the buffer until liquidation based on the liquidation threshold you enter. It assumes no price slippage, no interest accrual, and no fees—those should be layered on separately if your venue charges them.

Many protocols also surface a “health factor” that compresses the same idea: health factor = collateral value × (max LTV) ÷ debt. A health factor below 1 usually triggers liquidation. Because each chain and protocol defines limits per asset, always pull the exact liquidation threshold and borrow caps from your venue’s documentation or UI before relying on any estimate. Stablecoin collateral typically allows higher max LTVs than volatile collateral, but a depeg can erase that cushion quickly.

Collateral management in crypto has nuances beyond a static LTV:

• Oracle risk: Liquidations are usually driven by oracle prices. If the oracle lags or spikes, you can be liquidated even if spot briefly recovers.
• Interest and fees: Borrow APR, origination fees, and keepers’ liquidation penalties increase effective debt. Add them to your loan amount in the calculator to see a stricter buffer.
• Volatility clustering: Crypto prices can gap down faster than you can top up. A 5–10% buffer may be inadequate during stressed markets; many borrowers aim for materially lower LTVs (e.g., 30–50% of the maximum).
• Stable vs. volatile collateral: Using volatile collateral for a stablecoin loan concentrates risk in one asset. Using a basket (or tokenized index) can reduce single-asset shock.
• Cross-chain and bridges: Moving collateral to top up a position across chains or layers introduces bridge and time risk. Plan buffers with transfer time in mind.
• Liquidation price intuition: When you supply a collateral price, the calculator returns the price where liquidation would trigger. That is simply your entry price multiplied by (target LTV ÷ liquidation LTV). It ignores fees and slippage; real executions can be worse.
• Partial repayments and rebalancing: Paying down a slice of the loan or adding collateral both reduce LTV. Some protocols let you automate “top-ups” when LTV crosses a threshold; factor automation costs into your safety margin.

This tool keeps calculations client-side and intentionally simple: it treats LTV as loan ÷ current collateral value, and liquidation as the point where that ratio reaches your provided liquidation threshold. For full fidelity, layer in protocol- specific variables such as per-asset borrow caps, isolation mode rules, liquidation penalty, and interest accrual over time. Always verify numbers against your platform’s own risk dashboard before opening or resizing a position.