Terminologies
Overall Vault Health
Overall Vault Health reflects how safely the vault is operating relative to its risk limits.
Current Loan-to-Value (LTV) / Position LTV
The Current LTV displays how much the vault has borrowed relative to the total value of its collateral.
For example, if the Current LTV in the vault is 70%, it simply means the vault has borrowed $70 for every $100 of collateral deposited.
As market conditions change, the Current LTV may move up or down. If it rises too close to the Maximum LTV, the vault may automatically reduce borrowing to help lower risk. If it falls well below the Target LTV, the vault may increase borrowing position to keep strategy efficient.
Effective Vault LTV
Effective Vault LTV shows how much the vault has borrowed relative to the vault’s total assets. It reflects the true leverage at the vault level, including non-leveraged assets and buffers.
Target LTV
The Target LTV is the borrowing ratio the vault is designed to maintain under normal market conditions.
It serves as the vault’s reference point for managing leverage. If the Current LTV rises above the Target LTV, the vault may reduce borrowing to lower risk and vice-versa.
Max Asset Utilization
Max Asset Utilization is the maximum percentage of total vault assets that can be deployed into a leverage strategy. The remaining portion stays unallocated to support liquidity, rebalancing, and risk management.
This helps ensure:
Smoother withdrawals
Lower liquidation risk
Better operational flexibility
Maximum LTV
The Maximum LTV is the highest borrowing ratio the vault can safely reach. This limit comes from the external strategy the vault uses and is not set by the vault itself.
For example, if a strategy runs on a lending market where the collateral factor is 90%, the Maximum LTV for the vault on that market would also be 90%. This means the vault cannot safely borrow more than $90 for every $100 of collateral.
Because this limit is native to the external strategy, it may differ across markets.
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