Borrowing Power

Understanding Borrowing Power

Borrowing power is primarily determined by the Loan-to-Value ratio. Each collateral asset has a predefined LTV, which sets the maximum borrowing capacity using that asset.

• E-Mode: In E-Mode a consistent LTV is applied to all assets, simplifying strategy but maintaining the same risk profile across the board.

Balancing Opportunity and Risk

Pike enables users to leverage their collateral to borrow assets. While maximizing borrowing power can enhance opportunities, it also introduces risk. Understanding and managing this balance is crucial to maintaining a safe position.

Managing Risk While Maximizing Borrowing Power

Mitigating risk while optimizing borrowing power involves strategic planning and active management of your position.

• Borrow Conservatively: Avoid borrowing close to the LTV to maintain a safe Health Factor.

• Monitor Regularly: Use the dashboard to track your Health Factor and overall risk metrics continuously.

• Act Decisively: If market volatility impacts your position, supply additional collateral or repay borrowed assets promptly.