Crypto Loan LTV Explained: How Much Can You Borrow?
Loan-to-value explained for crypto borrowing: how LTV is calculated, how it differs from the liquidation threshold and health factor, typical LTV ranges by collateral type, and how to pick a safe number.
Last updated: July 2026
Every crypto-backed loan comes down to one number you choose and one number the protocol chooses. You choose your loan-to-value ratio. The protocol chooses the liquidation threshold. The distance between those two numbers is the entire margin of safety in your position, and most liquidations happen because the borrower never consciously decided what that distance should be.
This guide explains how LTV is calculated, how it differs from the liquidation threshold and the health factor, what LTV ranges are typical for different collateral types, and how to work backwards from a price you could survive to a borrowing amount you can live with.
What is LTV in crypto lending?
Loan-to-value is the ratio of the amount you borrow to the market value of the collateral you posted, expressed as a percentage. If you post 10,000 USD of collateral and borrow 5,000 USD, your LTV is 50%. It is the single measure of how aggressively a loan is drawn.
The formula is simply: LTV = (borrowed amount / collateral value) x 100.
The number is not static. You fix the borrowed amount at the start, but the collateral value moves continuously with the market, so your LTV rises whenever your collateral falls. That is the whole risk of the product in one sentence.
LTV vs liquidation threshold vs health factor
These three terms describe the same position from different angles, and confusing them is expensive.
| Term | What it means | Who sets it |
|---|---|---|
| Maximum LTV | The highest ratio at which you are allowed to open or increase a loan | The protocol, per collateral asset |
| Current LTV | Your live borrowed amount divided by current collateral value | The market, continuously |
| Liquidation threshold | The LTV at which your position becomes eligible for liquidation | The protocol, always above max LTV |
| Health factor | A single ratio expressing how far your position sits from liquidation | Derived; falls as LTV rises |
The gap between maximum LTV and the liquidation threshold is a deliberate buffer. It exists so that a position opened at the maximum permitted ratio is not instantly liquidatable on the first tick of adverse price movement. It is a small buffer, not a comfortable one, which is why borrowing at the maximum is almost always a mistake.
A worked example
Suppose you post collateral worth 10,000 USD in a market with a 70% maximum LTV and an 80% liquidation threshold.
- Borrow the maximum, 7,000 USD. Your position is liquidatable once collateral falls to 8,750 USD, a drop of only 12.5%.
- Borrow 5,000 USD instead, an LTV of 50%. Liquidation now arrives at 6,250 USD of collateral, a drop of 37.5%.
- Borrow 3,000 USD, an LTV of 30%. You survive a 62.5% drawdown before liquidation.
Cutting your borrowing from 7,000 to 5,000 costs you 2,000 USD of liquidity and buys you triple the tolerance for a drawdown. In a market that routinely moves 20% in a week, that trade is usually worth making.
Typical LTV ranges by collateral type
Maximum LTV is not a policy preference; it is a liquidity estimate. The protocol is asking how much of this asset it could sell, quickly, in a stressed market, without moving the price against itself. Deeper markets get higher ratios.
| Collateral type | Typical maximum LTV | Why |
|---|---|---|
| Major stablecoins | Highest tier | Deep liquidity, minimal price risk |
| Blue-chip assets (BTC, ETH) | High tier, commonly 70-80% | Deep order books across many venues |
| Liquid staking tokens | Moderate; often near their underlying | Backed 1:1 by the staked asset, but with an unbonding delay |
| Long-tail tokens | Low | Thin liquidity, high slippage on liquidation |
| NFTs | Lowest, typically capped well below 50% | Illiquid, floor prices gap rather than trend |
How LTV works on JewelSwap
JewelSwap operates two distinct borrowing products, with different LTV logic.
NFT-backed loans
On MultiversX, JewelSwap lets you borrow EGLD against an NFT from a verified collection, at up to 50% of the NFT's value. If a collection's floor price is 3 EGLD, that means borrowing up to 1.5 EGLD while keeping ownership of the NFT.
Interest is charged per interest plan rather than as a variable rate. The documentation's worked example is a 16-day plan at 4%, which on a 1.5 EGLD loan is 0.06 EGLD of interest. You can pay interest to extend the loan, or repay the principal plus accrued interest to recover the NFT.
Liquidation is triggered either by failing to pay accrued interest or by the health factor deteriorating, at which point the NFT is put up for sale to recover the lender's position. Most of the interest paid flows to the EGLD lenders supplying the pool, with a portion going to the protocol.
The 50% cap looks conservative next to the 70-80% ratios common for blue-chip tokens, and it should. NFT floor prices do not decline smoothly; they gap. A conservative cap is the only defence a lender has against a collection that loses half its floor in a day.
Money markets
JewelSwap's money markets run in two modes. Isolated markets ring-fence a specific asset pair, so risk from a volatile asset cannot spread into the rest of your portfolio. Global or cross markets let your whole portfolio act as collateral, which is more capital-efficient but shares risk across every position you hold. Pricing draws on multiple oracle sources, Pyth Network, Umbrella Network, AshSwap and xExchange feeds, rather than a single feed.
How to choose a safe LTV
Work backwards from a drawdown you believe you could sit through, rather than forwards from how much cash you want.
- Pick a survivable drawdown. For volatile collateral, 50% is a realistic stress case, not a pessimistic one.
- Derive the LTV. To survive a 50% drop with an 80% liquidation threshold, your starting LTV must be at or below 40%.
- Subtract for interest. Accrued interest raises your debt over time even if prices never move. On fixed-term plans, budget the full interest amount up front.
- Keep repayment capital liquid. A partial repayment is the fastest way to restore a health factor. That only works if the funds are not themselves locked in the position.
- Monitor, do not assume. Check your health factor on a schedule you actually keep. Liquidations cluster in the hours people are not watching.
Frequently asked questions
What does LTV mean in crypto?
LTV, or loan-to-value, is the amount you have borrowed divided by the market value of your collateral, expressed as a percentage. A 5,000 USD loan against 10,000 USD of collateral is a 50% LTV. It rises automatically whenever your collateral loses value.
What is a typical LTV for a crypto-backed loan?
It depends entirely on the collateral. Blue-chip assets such as BTC and ETH commonly support maximum LTVs in the 70-80% range on major protocols, long-tail tokens far less, and NFT collateral least of all. JewelSwap caps NFT-backed borrowing at up to 50% of the NFT's value.
What LTV should I actually borrow at?
Well below the maximum. A useful method is to pick the drawdown you could survive, then set your LTV so liquidation sits beyond it. To survive a 50% collateral decline under an 80% liquidation threshold, start at 40% LTV or lower, and leave headroom for accrued interest.
What happens if my LTV gets too high?
Your position becomes eligible for liquidation once current LTV reaches the liquidation threshold. The protocol sells collateral to repay the debt, and you lose the collateral sold. You can prevent this by repaying part of the loan or adding collateral before the threshold is reached.
Can I borrow against ETH without selling it?
Yes, that is the core purpose of a crypto-backed loan. You post the asset as collateral, draw a loan against it, and retain ownership and price exposure as long as you stay clear of the liquidation threshold and keep interest paid.
Does a higher LTV cost more in interest?
Not directly through the ratio itself, but in variable-rate money markets, higher utilisation of a pool pushes borrow rates up, and a larger loan accrues more interest in absolute terms. On fixed interest plans, such as JewelSwap's NFT loans, the cost is a set percentage of the borrowed amount for the term.
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