Loan-to-Value ratio—the percentage of collateral value that can be borrowed. Each lending protocol sets max LTV per asset (e.g., 75% for SOL means $100 SOL collateral = max $75 borrow). If debt/collateral exceeds the liquidation LTV (e.g., 85%), the position is liquidatable. Conservative LTV settings protect against rapid price drops.
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Loan-to-Value ratio—the percentage of collateral value that can be borrowed. Each lending protocol sets max LTV per asset (e.g., 75% for SOL means $100 SOL collateral = max $75 borrow). If debt/collateral exceeds the liquidation LTV (e.g., 85%), the position is liquidatable. Conservative LTV settings protect against rapid price drops.
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AMMs, routing, liquidity, lending, and trading infrastructure.
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LTV (Loan-to-Value) (ltv) Category: DeFi Definition: Loan-to-Value ratio—the percentage of collateral value that can be borrowed. Each lending protocol sets max LTV per asset (e.g., 75% for SOL means $100 SOL collateral = max $75 borrow). If debt/collateral exceeds the liquidation LTV (e.g., 85%), the position is liquidatable. Conservative LTV settings protect against rapid price drops. Aliases: LTV Related: Collateral, Liquidation
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Assets deposited into a lending protocol to secure a loan. Each asset has a collateral factor (e.g., SOL at 80% means $100 of SOL supports $80 in borrows). If the collateral value drops below the maintenance threshold, the position is liquidated. Volatile assets have lower collateral factors than stablecoins.
The process of repaying a borrower's debt by selling their collateral when their position's LTV exceeds the liquidation threshold. Liquidators (typically bots) repay a portion of the debt and receive the collateral at a discount (liquidation bonus, typically 5-10%). Liquidation keeps lending protocols solvent. On Solana, liquidation bots compete via Jito bundles.
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An uncollateralized loan that must be borrowed and repaid within the same transaction. If the loan isn't repaid by transaction end, the entire transaction reverts atomically. Flash loans enable arbitrage, collateral swaps, and self-liquidation with zero capital. On Solana, Solend and MarginFi offer flash loans; they're also used in sandwich attacks.
Per-share/per-token value calculated as (total assets - liabilities) / outstanding tokens. Published daily by fund administrators, used to price mints and redemptions of tokenized fund shares. Discrepancies vs market price create arbitrage.
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Assets deposited into a lending protocol to secure a loan. Each asset has a collateral factor (e.g., SOL at 80% means $100 of SOL supports $80 in borrows). If the collateral value drops below the maintenance threshold, the position is liquidated. Volatile assets have lower collateral factors than stablecoins.
The process of repaying a borrower's debt by selling their collateral when their position's LTV exceeds the liquidation threshold. Liquidators (typically bots) repay a portion of the debt and receive the collateral at a discount (liquidation bonus, typically 5-10%). Liquidation keeps lending protocols solvent. On Solana, liquidation bots compete via Jito bundles.
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A protocol that enables token swaps using algorithmic pricing against pooled liquidity instead of matching individual buyers and sellers. AMMs use mathematical formulas (typically constant product x*y=k) to determine prices based on the ratio of tokens in a liquidity pool. On Solana, major AMMs include Raydium, Orca, and Meteora.
An AMM design where liquidity providers concentrate their capital within specific price ranges instead of across the full 0-to-infinity range. CLMMs dramatically improve capital efficiency—LPs earn more fees per dollar deposited within their active range. If the price moves outside the range, the position becomes inactive. Orca Whirlpools and Raydium CLMM are leading implementations on Solana.
A smart-contract-held reserve of two or more tokens that enables trading via an AMM. Users deposit token pairs in specified ratios to become liquidity providers and earn trading fees. Pools are identified by their token pair and fee tier. Pool depth (total value locked) determines price impact for trades.
A token issued to liquidity providers representing their proportional share of a pool's reserves and accrued fees. LP tokens can be burned to withdraw the underlying assets. The value of LP tokens changes as the pool's token ratios shift and fees accumulate. LP tokens are often stakeable in yield farming programs for additional rewards.