Flexible Crypto Loans: Interest, Repayment, and Collateral Risk
Summary
This guide explains how a flexible crypto loan works, from borrowing against spot assets to repayment and collateral adjustments. Interest accrues hourly at a floating rate that changes with market supply and demand; the article explains that partial hours count as a full hour. Borrowers can repay using the borrowed asset or convert collateral to repay, with interest settled before principal. It also notes that each borrowing creates a separate order and that a single account may hold up to ten active flexible loan orders.
The main risk framework is loan-to-value (LTV), defined as loan value divided by collateral value. The platform recalculates this ratio frequently and compares it with margin-call and liquidation thresholds: borrowers may need to add collateral as prices move, while crossing the liquidation level can result in forced liquidation. The article is a product operating guide, not an independent comparison of loan terms or a study of borrowing outcomes. Its fixed-versus-flexible comparison is incomplete, and it does not quantify how rate changes or collateral volatility affect realized costs and losses.
Key ideas
- Flexible loan interest changes with market conditions and is charged hourly, including for periods shorter than an hour.
- Repayments apply to accrued interest before principal, and partial repayment leaves the remaining debt accruing interest.
- Borrowers can repay with the borrowed asset or convert collateral, subject to stated minimum amounts.
- Adding collateral can lower LTV, while withdrawing excess collateral raises it.
- A rising LTV can trigger a margin call or liquidation, so collateral value and debt need ongoing monitoring.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.