Position Risk & Liquidations

Position Risk

In Current Lend, position risk is captured by the loan-to-value (LTV) ratio

Current LTV=(risk_adjusted_debt_value / collateral_value) * 100%

risk adjusted_debt_value=debt value* borrow weight

collateral_value = Σ(collateral_amount_j × price_j)

Notes:

Borrowers have three different LTV_ratios that expresses the risk of their position:

• Current LTV = Current position health

• Max LTV = Borrowing limit of your position - gives a buffer between Liquidation LTV

• Liquidation LTV = The LTV at which your position becomes eligible for liquidation

Borrow Weight

Borrow Weight (BW) are risk-adjusted values set per asset on Current-Lend that define how much of that asset can count toward a loan’s borrowing power.

Example：

For example, let’s assume you want to supply $100 of USDC as collateral and borrow either SUI or DEEP.

• USDC MAX LTV=80%

• SUI borrow weight=1

• DEEP borrow weight=1.3

• SUI borrow capacity against USDC = ($100 * 80%) / 1 = $80

• DEEP borrow capacity against USDC=($100 * 80%) / 1 .3= $61.5

Liquidation

If any debt position reaches the Liquidation LTV threshold, it becomes eligible for liquidation.

Partial Liquidations

To protect borrowers’ interests, Current adopts a soft-liquidation model. The Close Factor determines the share of a borrower’s position that a liquidator can liquidate in a single transaction. For example, if Close Factor = 0.2, a liquidator can liquidate at most 20% of the borrower’s collateral at a time.

Liquidation Penalties

The Current protocol sets liquidation penalties with different parameters for each token, based on factors such as liquidity, volatility, and others.

Example:

Assume a 5% liquidation penalty and close factor=20%. When User A’s loan hits the 80% liquidation LTV, a liquidator steps in and repays 20% of the debt, receiving 21% of the collateral in return (0.2*(1+0.05)). User A ends up with less collateral and less debt, a lower LTV, and the position stays open.

Asset(s)	Market	Liqudation Penalty
SUI	Main Market	6%
USDC	Main Market	5%
USDT	Main Market	5%
WBTC	Main Market	7%
ETH	Main Market	8%
SUI	XSUI Market	5%
STSUI	XSUI Market	7%
HASUI	XSUI Market	7%
SUI-STSUI	XSUI Market	5%
HASUI-SUI	XSUI Market	5%
USDC	Altcoin Marke	5%
DEEP	Altcoin Market	9%
WAL	Altcoin Market	9%