We've received feedback from our clients that they'd like to make use of their excess loan collateral when the price of the digital asset collateral goes up and the LTV goes down.
To address this, we're excited to launch a new feature called "excess collateral redemption" that unlocks your excess collateral when your LTV dips below 30%.
Here's everything you need to know to take advantage of this feature:
Eligible Loans for Excess Collateral Redemption
Both B2X and Dollar Loans are eligible when:
- They have been active for more than 60 days and have an LTV below 30%.
- There has been no excess collateral redemption for the loan in the last 60 days.
- There is at least $100 USD worth of excess collateral. The maximum amount that can be redeemed is $100,000 USD worth of excess collateral.
How Excess Collateral Redemption Works
- When a loan is eligible, you'll see a "Redeem collateral" button in the LTV column of your "Active Loans" tab.
- You'll have the ability to unlock the amount of collateral that will bring your loan's LTV back to the target LTV of 40% and send it back to the applicable Transaction account.
- If the value of your excess collateral is worth more than $100,000 USD, you'll only be able to redeem a maximum of $100,000 USD worth of collateral. In these cases, the LTV may not reach 40% after redemption.
What You Can Do with Your Redeemed Collateral
The collateral you redeem will be sent back to your Transaction account. Once it's there you can use it to earn interest, make trades, open a new loan, or get a Dual Cryptocurrency Note (DCN), as available.
Availability of Collateral Redemption
This feature is currently available in all jurisdictions in which Ledn Loans are eligible. If you have any additional questions, please contact firstname.lastname@example.org.
Ledn is committed to giving clients control over their assets, which is why we are excited to offer a feature like Loan Rebalancing. Our interest rates and loan rebalancing thresholds are influenced by market conditions. Lower interest rates are typically available at higher collateralization ratios. Hence, it is essential for Ledn to maintain sufficient collateral to increase the collateralization ratio of its institutional loans. This helps subsidize the borrowing rates for Standard loan clients. As a result, we may periodically adjust loan rebalancing thresholds.