My Collateralized $ATOM Loan Risk raised to Medium with recent Crypto Market Crash - Strategy Ahead...

Hey All,

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I had recently Collateralized $ATOM on KUJIRA APP BLUE to mint $USK worth $280+. I used this money to buy some coins/tokens thinking that I'll repay the loan from income received by staking $EVMOS. That was the plan until recently the crypto crash happened and majority of the coins took a heavy beating with their prices falling sharply. Currently, $ATOM is trading less than $13 and when I had Collateralized $ATOM it was trading $15+ down $2+ and this resulted in my Loan risk move to medium from low.

Loan Risk & LTV Earlier

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I am still at a safer zone before my collateral could be liquidated. As for collateral to be liquidated $ATOM should trade below $8, which I think is next to impossible. But then anything can happen in crypto world and you need to be well prepared for the worst to happen.

Currently, what I am doing is that instead of paying back the loan. I am buying $ATOM from my staking rewards and other passive income and increasing my collateral deposit i.e. $ATOM. If you see carefully, earlier I had collateralized 48 $ATOM and now in the current position I have close to 56+ $ATOM collateralized. So what I am doing is simply enhancing my collateral position and not taking further loan from it. This is helping me to being my LTV and at the same time bringing the loan risk as well.

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Following is the current position of my collateral loan::

  • Collateral Value = $727+ USD down almost $50 coz. of $ATOM price
  • USK Borrowed = $282+
  • New LTV = 38+%
  • Liquidation Price - $8+

Loan to value (LTV) determines the amount of crypto one would need as collateral before one could get a loan. I want to keep LTV as low as possible and for that sake I am looking to buy $ATOM and increasing my collateral deposit. Once the crypto market recovers this will further automatically bring the LTV and loan risk down and my position will be much safer. And need not worry about the liquidation. In worst case scenario, if the market continues to crash I have plan B as well. Wherein, I would liquidate some of my recent $FBA HOLDings and use the same to pay off the debts and not loose any of the $ATOM that I have put in for collateral and free it from the smart contract.

#collateral #loan #ltv #cryptoloan #Collateralized #howtotakecryptoloan

Demystify - How Collateral works in Crypto?

Image Credits:: kujira.app,

Best Regards

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7 comments
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Good to see
That you are on top of potential margin calls/liquidations!
Hopefully you won’t need to post anymore collateral.

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this is complex, i think this why i have not look into anything collateralized. i hope your strategy work

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Not looked at my ATOM holdings for a while, but I think the price did bounce back a bit. Good luck with all your collateral goings on...

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