Mint LTV
| Collateral Type | Mint LTV |
|---|---|
WEMIX | 45% |
stWEMIX | 45% |
WEMIX$ | 80% |
‘Mint LTV’ is set for each collateral type based on price stability. For example, if WEMIX has Mint LTV of 45%, it means that a user can deposit $100 worth of WEMIX as collateral and mint up to 45 WCD.
Max Mint
Maximum mintable WCD depends on the value and 'Mint LTV' of collateral.
Example: Collateral 100 USD
WEMIX Max LTV : 45%. Thus, 45 WCD mintable
WEMIX$ Max LTV : 80%. Thus, 80 WCD mintable
Example: Collateral : 200 USD
WEMIX Max LTV : 45%. Thus, 90 WCD mintable
WEMIX$ Max LTV : 80%. Thus, 160 WCD mintable
As demonstrated in the examples above, more WCD can be minted with higher collateral value and higher 'Mint LTV'.
LTV (Loan-To-Value)
LTV is the ratio of minted WCD to the value of deposited collateral. For example, if you deposit $100 worth of collateral and mint 30 WCD, LTV of the collateral would be 30%. Factors that affect LTV include :
Value of deposited collateral assets fluctuates in real-time, reflecting market price.
Accumulation of Stability Fee on minted WCD gradually increases LTV.
As such, LTV and Max Mint may fluctuate continuously even without additional collateral or WCD mint.
Example (Mint LTV of WEMIX : 45%)
Mint LTV (for initial WEMIX Collateral of 100 USD) : 45 WCD
WEMIX Collateral appreciates to 105 USD : Max 47.25 WCD mintable
WEMIX Collateral depreciates to 95 USD : Max 42.75 WCD mintable
LTV : 45% (45 WCD minted with WEMIX Collateral of 100 USD) :
WEMIX Collateral appreciates to 105 USD : LTV decrease to 42.86%
WEMIX Collateral depreciates to 95 USD : LTV increase to 47.37%
Even if the value of the collateral exceeds the ‘Mint LTV’ due to depreciation of collateral, Liquidation may not be triggered immediately. However, Liquidation may occur if LTV continues to rise(due to depreciation of collateral, or accumulation of Stability Fee) and reaches Liquidation LTV. To avoid Liquidation, users should monitor LTV continuously and consider the potential fluctuation of collateral value when determining the amount of WCD to mint.
For more information on Liquidation, please refer to "Liquidation" page
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