Loan-to-value

Mystic adjusts loan-to-Value (LTV) ratios per pool/asset in order to meet the different risk profiles of the underlying assets. This customization enables us to feature the best LTVs in every market which, for safe RWAs like US Treasuries, could range anywhere from 93% to 99%. This allows users to borrow more against their collateral compared to other platforms, effectively maximizing capital efficiency.

Benefits of High LTV

A high LTV ratio means that users can access more liquidity without needing to provide excessive collateral. This is most beneficial for those who want to leverage their investments or need quick access to capital for other opportunities. By offering competitive LTV ratios, Mystic Finance makes its platform more attractive to borrowers, increasing overall liquidity and RWA utility.

Risk Management

While high LTV ratios provide significant benefits, they also require robust risk management practices. Mystic Finance employs several mechanisms to mitigate the risks associated with high LTV borrowing, including real-time collateral monitoring and future insurance funds to cover potential bad debt on the pools. See more about how we manage risk in Risk Management.