Part 1/7:
Understanding Liquidation in Lending and Borrowing
Liquidation is a critical concept in the world of lending and borrowing, particularly in decentralized finance (DeFi). It represents a risk that can threaten our investments and affect our financial strategies. In this article, we'll explore the intricacies of lending and borrowing strategies with a special focus on how to avoid liquidation. Using real experiences and examples, we'll dissect four strategies that can help safeguard your assets during volatility in the market.
The Foundations: LTV and Liquidation Thresholds
Before delving into strategies, it's essential to understand two key metrics: