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  3. Margin calls and liquidations

What is the margin call process?

Margin call occurs at a Collateral to Principal Ratio of 150%, with an accelerated margin call at 135%. Automatic liquidation of collateral occurs at 110% to repay the total amount owed on the loan.

At a Collateral to Principal Ratio of 175%, a courtesy email notification is sent out to advise borrowers of the status of their loan and encourage improvement of the ratio by making a principal payment or adding additional bitcoin as collateral.

 

Our margin call process includes three stages as follows:

  • Margin Call (150% Collateral To Principal Ratio)
    • An automated margin call will occur if your CTP ratio reaches below 150%.
    • When the margin call is initiated, you will receive an email notifying you to bring your loan's collateral to principal ratio back to 165%.
    • You will have 48 hours to fulfill the first margin call.
  • Accelerated Margin Call (135% Collateral To Principal Ratio)
    • An automated accelerated margin call will occur if your CTP ratio reaches below 135%.
    • When the accelerated margin call is initiated, you will receive an email notifying you to bring your loan's collateral to principal ratio back to 165%.
    • You will have 4 hours to fulfill the accelerated margin call.

If the CTP ratio is not brought to 165% or greater by the margin call expiration (Margin call or Accelerated Margin Call), Unchained Capital has the right to liquidate a portion of the bitcoin held as collateral to improve the CTP ratio to a satisfactory level.

  • Liquidation (110% Collateral To Principal Ratio)
    • Liquidation of your loan collateral will occur immediately if your CTP ratio reaches 110%.
    • We will liquidate collateral to cover the outstanding principal of the loan; any remaining collateral will be returned.