Loan To Value
Loan To Value (LTV) is a number that indicates how much you can borrow based on your collateral.
The health factor is calculated on the basis of the LTV.
Here is a simple example to understand LTV:
-You deposit a $5,000 NFT
-If the LTV is 60% you can borrow up to 60% of the value of your NFT, so in this case $3000
-If the LTV exceeds 80% (and therefore the value of the NFT falls) you risk being liquidated.
The LTV must reach at least 80% to be at liquidation risk, this 80% is called the liquidation threshold.
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