Read the parametersMax LTV, liquidation threshold, bonus and supply caps
Thin liquidityDangerous even without volatility — liquidators cannot exit
OracleManipulable feeds have caused multiple protocol exploits
FBT Swap
What you should know
A lending protocol assigns different parameters to each accepted asset: maximum loan-to-value, liquidation threshold, liquidation bonus and supply caps. Those numbers are the protocol's own risk assessment, written down.
Reading them tells you more about an asset's risk than any description does.
Volatility and liquidity
An asset that moves sharply needs a wider buffer, which is why it receives a lower maximum LTV. An asset with thin liquidity is dangerous even if it is not volatile, because liquidators cannot sell it quickly without moving the price.
Low LTV plus a high liquidation bonus plus a tight supply cap is the protocol telling you it considers an asset risky.
Oracle quality
Collateral is only as reliable as the price feed valuing it. A thinly traded asset with a manipulable feed has been the basis of multiple protocol exploits, where an attacker moved a price to borrow against inflated collateral.
Check which oracle is used and whether the asset has deep enough markets for that oracle to be hard to move.
Correlation with your debt
Borrowing an asset that moves with your collateral is much safer than borrowing one that moves against it. Stablecoin debt against volatile collateral means only one side moves; volatile debt against volatile collateral means both.
The worst configuration is borrowing an asset that tends to rise exactly when your collateral falls, which is a liquidation engine.
Wrapped and derivative collateral
Liquid staking tokens, bridged assets and wrapped versions all add a layer between the collateral and the thing it represents. A discount event in that layer moves your health factor with no movement in the underlying.
FBT Swap shows live position health where the protocol exposes it, with the data source named, and never guarantees a liquidation warning will arrive in time.
At a glance
At a glance
01
Read the parameters
Max LTV, liquidation threshold, bonus and supply caps
02
Thin liquidity
Dangerous even without volatility — liquidators cannot exit
03
Oracle
Manipulable feeds have caused multiple protocol exploits
04
Worst pairing
Debt that rises when your collateral falls
FAQ
Frequently asked questions
Clear answers before you decide.
Is a stablecoin always the safest collateral?+
It removes price volatility, which is the main driver of liquidation, and it introduces depeg risk and issuer risk. Safer in the usual case, not risk-free.
Why does the protocol limit how much of an asset it accepts?+
Supply caps limit the protocol's total exposure to one asset failing, and they prevent an attacker accumulating enough collateral to make manipulation worthwhile.
Can collateral parameters change?+
Yes, through governance, and sometimes quickly during stress. A threshold being lowered raises your LTV instantly without any price movement at all.
Risk notice
Crypto assets are volatile and on-chain transactions cannot be reversed. You can lose money, including all of it. Nothing here is financial advice.
