Liquidation Threshold Price Calculator
Find the collateral price at which a loan becomes liquidatable, or work backward to the maximum debt or minimum collateral that keeps your liquidation price where you want it.
| Price drop | Collateral price | LTV | Health factor | Status |
|---|
Debt ↑
Liquidation price rises in direct proportion to debt — borrowing 20% more moves your liquidation price 20% closer to the current price.
Collateral ↑
Liquidation price falls inversely with collateral — doubling the collateral halves the price at which you are liquidated.
Higher LLTV = less cushion
A higher liquidation threshold lets you borrow more against collateral but pushes the liquidation price closer to the current market price.
Interest raises the risk
Accrued interest increases debt over time, so the liquidation price drifts upward even if the collateral price never moves.
How to Use This Calculator
A lending position is liquidatable when the collateral's value falls to the point where debt reaches the protocol's threshold. This tool finds that price from your debt, collateral and threshold.
1. Pick the threshold convention
Use LLTV % if your protocol quotes a maximum loan-to-value (for example 80%), or Collateral ratio % if it quotes a minimum ratio (for example 150%).
2. Enter the threshold
Use a preset or type the exact value from your protocol's documentation — parameters differ by asset and market.
3. Enter your position
Fill in debt (USD), collateral amount and the current collateral price for health context.
4. Choose what to solve for
Solve for the liquidation price, or set a target price and solve for the maximum debt or minimum collateral needed.
5. Read the health gauge
The gauge and context line show your health factor and how far the price can fall before liquidation.
6. Switch to Advanced
See price-drop scenarios, sensitivity to each input, current LTV and remaining borrowing headroom.
What This Tool Offers
A planning aid for over-collateralized DeFi borrowing — estimate your risk before you borrow, and monitor it afterwards.
Solve any direction
Find the liquidation price, the maximum safe debt, or the minimum collateral for a target liquidation price.
Two threshold conventions
Works with LLTV-style parameters and Maker-style collateral ratios, converting between them automatically.
Health factor and gauge
See health factor, current LTV and the percentage price drop your position can absorb.
Price-drop scenarios
A table showing LTV and health factor at 10% to 60% declines, with at-risk and liquidated rows highlighted.
Sensitivity check
See how a +1% change in each input moves the result.
Transparent math
Every step shows the conversion factor and the final division explicitly.
What Is a Liquidation Price?
In over-collateralized DeFi lending you deposit collateral and borrow against it. If the collateral's market price falls far enough that your debt approaches the value the protocol allows you to borrow, your position becomes liquidatable: third parties can repay part of your debt and seize collateral at a discount. The liquidation price is the collateral price at which that threshold is reached.
Formula and Variables
k = 1 / LLTV (LLTV convention) or k = collateral ratio (Maker convention)
| Symbol | Meaning | Notes |
|---|---|---|
| Debt | Amount owed, in USD | Includes accrued interest |
| Collateral | Tokens deposited | Units of the collateral asset |
| LLTV | Liquidation loan-to-value, e.g. 80% | Debt ÷ collateral value at liquidation |
| k (ratio) | Collateral value ÷ debt at liquidation | Equals 1 ÷ LLTV, e.g. 150% ↔ 66.7% |
| Health factor | Current price ÷ liquidation price | Below 1.0 means liquidatable |
The formula as written, Debt · LTV / Collateral, treats the threshold as a collateral-ratio factor. Protocols that quote a maximum LTV (LLTV) use the equivalent form Debt ÷ (Collateral × LLTV), which this tool applies when the LLTV convention is selected.
Worked Example
k = 1 / 0.80 = 1.25
Liq. Price = 15,000 × 1.25 / 10 = $1,875 per ETH
Health factor = 3,000 / 1,875 = 1.60 → price can fall 37.5% before liquidation
Frequently Asked Questions
Health factor is the ratio of your collateral's threshold-adjusted value to your debt. With a constant debt, it equals the current price divided by the liquidation price. Above 1.0 the position is safe; at or below 1.0 it can be liquidated. Many users keep it well above 1.5 for a buffer.
Borrowing interest accrues on your debt. Since liquidation price is proportional to debt, a larger balance means the price at which you hit the threshold moves closer to today's price, even if the collateral price is flat.
Repay part of the debt or add collateral. Both reduce the Debt-to-Collateral ratio, and because liquidation price is proportional to that ratio, either action moves the liquidation price further below the current market price.
What it means
In DeFi lending, the liquidation price is the value of collateral at which the loan will be liquidated. It is calculated from the debt, liquidation threshold (e.g., 80%), and collateral amount. This is used to monitor positions and to manage risk. Understanding this helps borrowers avoid liquidation by maintaining adequate collateral.
Worked example
Liquidation Threshold Price – Two Detailed Examples
Real‑World| Parameter | Value |
|---|---|
| Debt Value | $10,000 |
| Liquidation Threshold | 0.80 |
| Collateral Amount | 0.2 BTC |
| Parameter | Value |
|---|---|
| Debt | $5,000 |
| Threshold | 0.75 |
| Collateral | 2 ETH |
Common mistakes
- Liquidation price: The price at which the collateral is worth less than the loan.
- Debt value: The total debt (including interest).
- Liquidation threshold: The maximum LTV allowed (e.g., 80%).
- Collateral amount: The quantity of collateral tokens.
- Result: The price per unit of collateral at liquidation.
Applications
Liquidation threshold price (DeFi lending) calculates the price at which a loan position becomes eligible for liquidation, based on the debt and collateral amount. Borrowers use this to set stop‑loss levels and to manage risk. By knowing the liquidation price, they can take corrective action before being liquidated. This is a critical metric for safe borrowing.
- Setting stop‑loss and risk management levels for loans
- Monitoring the health of a borrowing position
- Deciding when to add collateral or repay debt
- Understanding the risk of liquidation
- Educational understanding of DeFi liquidation mechanics
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