Loan Calculations

How loan amounts are calculated on MYSO v1

The amount a user can borrow from a given pool is determined by a number of factors, including the pledge amount (post transfer and pool fees), the maxLoanPerColl parameter defined for that given pool (maximum loanable amount per unit of pledged collateral), and the total available liquidity in the pool.

This amount can be expressed as a function of the pool's utilization, meaning that the amount that one can borrow will fluctuate based on the currently available liquidity.

Visualization of how loanable amount per collateral unit changes for different pool utilization levels

The Loan-to-Value (LTV) for a MYSO v1 pool thus also fluctuates based on utilization and pool parameterization. The more collateral a user pledges, the lower the LTV, and vice versa. Since pools are oblivious to the price of collateral, users can borrow at a LTV greator than or equal to 1 if the collateral price falls below the maxLoanPerColl parameter. More information on how LTV plays into MYSO v1 can be found in the Oracle Independence section.