Collateralization ratio
Last updated
Last updated
In the AlphBanX platform, the collateralization ratio (CR) is a critical metric that ensures the stability and security of loans.
The Collateralization Ratio is the ratio of the value of your deposited ALPH to the amount of ABD you’ve borrowed. A higher CR indicates that your loan is well-secured, lowering the risk of liquidation. Maintaining a strong CR helps safeguard your position against market volatility and ensures the overall health of the protocol.
AlphBanX mandates a minimum CR of 150%. This means your collateral must be worth at least 1.5× the amount of ABD you borrow. If your CR drops below 150%, your vault is flagged for liquidation.
Collateral Ratio (CR%) = (Value of Collateral / Outstanding ABD Debt) × 100
Example:
You deposit $3,000 worth of ALPH
You borrow 1,000 ABD
Your CR = (3,000 / 1,000) × 100 = 300%
If your CR falls below 150%, the vault becomes eligible for liquidation
The loan is then auctioned off using bids from Auction Pools (5%, 10%, 15%, and 20% discount tiers)
Your ALPH is sold at a discount to repay your ABD debt
Any leftover collateral is returned to you
AlphBanX provides users with visual tools and live metrics:
Live CR% tracker in your dashboard
Options to add more ALPH or repay ABD at any time
ALPH price volatility (down = CR drops)
Borrowing more ABD without increasing collateral
Partial loan repayment (improves CR)
Additional ALPH deposits (also improves CR)
⚡ Tip: Keeping your CR above 200% is a recommended best practice. It gives you a cushion against market swings and helps protect your vault from liquidation.