Collateral ratio
collateralisation ratioCR
Collateral value / debt value — the headline solvency metric for CDPs.
Most CDP protocols liquidate when the ratio falls below a stated minimum (DAI ~150%, LUSD ~110%, crvUSD soft-band ~100-150%). Higher ratios = safer position, less capital efficiency. See also Health factor.
Related terms
- CDP (collateralised debt position)A user-opened debt position backed by crypto collateral — the issuance mechanism for DAI, LUSD, GHO, crvUSD.
- LiquidationForced sale of collateral when a borrower's health factor falls below the protocol's threshold.
- Health factorAn Aave/Spark-style metric: collateral × liquidation-threshold / debt — liquidation triggers when it drops below 1.
- Over-collateralisationBacking debt with collateral worth more than the debt itself — the standard for permissionless CDP stablecoins.