​​ Hey Nimbus Community, Today, on the Nimbus Glossary, we’ll | NIМВUS | Official News Channel

​​ Hey Nimbus Community,

Today, on the Nimbus Glossary, we’ll be covering another term — Collateral Ratio

For example, if your loan value is 1 ETH and your collateral value is 1,5 ETH (worth of any other asset), then your collateralization rate is 150%.

Here are some interesting facts:
Users of the Nimbus Borrow dApp can set their own collateral ratio from 120% to 1000% to be in control of the situation.
This not only ensures that all lenders’ assets are safe and overcollateralized: it also helps borrowers manage the risk of loan liquidation.

Tip: at Nimbus, loan liquidation happens when the collateral ratio goes below 115%. So higher the amount of collateral ratio, the better, because if the asset exchange rates suddenly change, the collateral ratio may also drop below 115%. This in turn would result in the loan being liquidated and the user will have to “buy” it back in the Liquidations section.

Don’t you worry, though! Here at Nimbus, we protect our borrowers from experiencing such a setback via push notifications.
The push notifications are triggered when the collateral level drops to 130%. Simply make sure to keep the Nimbus Platform website open and you’ll get notified.