Crypto Loans: Everything You Need to Know

What Is Crypto Loans

Crypto Loans is a service offered by HTX that allows real-name verified users on the platform to borrow digital assets by pledging specified assets in their account as collateral. HTX's verified users can access the Crypto Loans service, and the borrowed assets will be credited to their HTX account within 1 second.

Advantages of Crypto Loans

Essentially, Crypto Loans is designed to cater to users' needs. When users hold some high-quality assets but do not want to sell them, they can pledge these assets through HTX's Crypto Loans service and borrow the cryptos they need.

For example, if a user holds BTC and anticipates a price surge for X tokens, they can pledge their BTC in Crypto Loans to borrow the required amount of USDT, which can then be used to purchase X tokens. When the price of Token X rises as expected, the user can sell it, repay the borrowed USDT, and reclaim the pledged BTC, thereby capturing the profit opportunity. Currently, Crypto Loans supports the borrowing of USDT, BTC, and ETH.

HTX has launched its Crypto Loans product with flexible, dynamic interest rates, which enables users to borrow and repay at any time based on their needs, without concerns about repayment and settlement deadlines. Furthermore, unlike the fixed-term loan product, this new offering will have its interest rate adjusted in line with the platform's lending rates. The dynamic interest rate mechanism ensures the platform stays competitive within the industry.

Forced Liquidation Mechanism and Other Features of Crypto Loans

Crypto Loans Interest = Borrowed Assets × Hourly Interest Rate × Borrowing Duration. Loan interest is calculated based on the actual number of hours used, with any duration less than one hour counted as one hour. The actual loan interest rate will be based on the rate shown at the time of borrowing.

When the user's loan-to-value (LTV) ratio exceeds the margin call LTV ratio, the platform will notify the user to add collateral or repay the loan. If the user's LTV ratio surpasses the platform's liquidation LTV ratio, the platform will liquidate the user's pledged assets to repay the loan.

LTV Ratio = Borrowed Assets / Collateral Assets (Collateral assets are locked in the spot account). Setting of LTV Ratio Limits (The LTV ratio limit may vary based on the type of pledged asset)

Initial LTV Ratio（80%） ：The initial loan amount cannot exceed 80% of the value of the pledged assets

Margin Call LTV Ratio（85%）：Reach the margin call threshold to remind users to add collateral

Liquidation LTV Ratio（90%）：Once the liquidation threshold is reached, automatic liquidation will occur.

Liquidation Process: When a user's LTV ratio reaches 90%, the system will enter automated liquidation mode. It will liquidate the user's collateral assets until the borrowed amount is fully recovered. The remaining collateral assets will stay in the user's Spot account, and the order will be closed.