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  3. Margin calls and liquidations

What is the margin call process?

A margin call will be triggered if your loan's collateral-to-principal falls below 150%. If you do not satisfy the margin call in time, collateral will be liquidated.

A margin call will occur at a collateral-to-principal (CTP) ratio of 150%, with an accelerated margin call at 135%. Immediate liquidation of collateral occurs at 110% to repay the principal amount owed on the loan.

175% CTP ratio

At a collateral-to-principal ratio of 175%, we send a courtesy email notification to advise borrowers of the status of their loan and encourage the improvement of the ratio by making a principal payment or adding additional bitcoin as collateral.

160% CTP ratio

At a collateral-to-principal ratio of 160%, a second courtesy email notification is sent.

150% CTP ratio—margin call

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.

135% CTP ratio—accelerated margin call

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.

Warning: If an event of default occurs due to failure to satisfy your CTP requirements, our current process is to partially liquidate collateral and to apply the net proceeds to outstanding balances in order to achieve a collateral-to-principal ratio of 200%. If your loan’s outstanding principal balance would be less than $10,000 USD following a liquidation, we will instead liquidate sufficient collateral to fully repay the outstanding loan balance. Unchained reserves its rights to change or eliminate this process in response to market conditions.

110% CTP ratio—liquidation

At a CTP ratio of 110%, a liquidation of loan collateral will be initiated immediately to pay the outstanding loan obligations and close the loan; any remaining collateral will be returned to you.