Crypto Loan

Crypto Loan* is a program where users can collateralize their crypto assets as a means to borrow more crypto in return. 

Please refer to actual program for the real time APY % and LTV%. 

*Do take note that the Loan program will streamlined for premium and platinum Accredited Investor and Institutional users from 1stOct'23 onwards.*

 

Getting Started

Click on More and then Crypto Loan to access the program :

 

You will come to below page : 

 

Scroll down to the bottom of the page.

• Assets to supply will be the the token type that can be utilized for this program ( taken from your tokenize spot wallet) 
• Assets to Borrow is the tokens that you can loan from this program. 

 

Using TKX as a example, click on the Orange Deposit button on the right of TKX under Assets to supply. A pop-up will appear.

Input the amount you would like to deposit and click Confirm.

 

Once successfully deposited, the details will appear under Your supplies and the Available balance will be updated as well. 

 

To continue, click on the toggle under Collateral and it will turn orange.

 

Next, scroll to Assets to Borrow.

 

For E.g., Let's take USDT as an example and click on the Borrow button

 

A pop-up will appear.

Read through it carefully and input the amount you would like to loan.

Click the Confirm button to proceed.

 

This transaction will appear under Your borrows with the Total Loan amount showing and updated LTV showing in Current LTV.  The actual amount will be reflected under your Tokenize spot wallet.

 

To repay the loan, go to Your borrows and click on the Repay button:

 

Input the amount you would like to return and click on Confirm. 

This amount will be deducted from your spot wallet. 

 

If it is a 100% repayment of loan, the transaction statement will be cleared from Your Borrows

 

How to View the Record History

Click on Loan History

It will lead you to this page, where you can see the full record or you can to choose to view different coin types and transaction types.

Fundamentals of Crypto Loan

How is LTV computed by the system ? 

The loan-to-value (LTV) ratio is a measurement for evaluating lending risk. The ratio measures the notional value of a loan against the market value of its collateral. For instance, a high LTV ratio represents a high financial risk.

LTV = Loan Amount / Collateral Amount x 100%

*Loan Amount = Principal + Interests

Example: 1 BTC is equivalent to 7,400 USD on 2020/03/12 9:00 AM  UTC, thus 0.01938571 BTC equals to 143.45 USDT

LTV (%) = 100 USDT / 0.01938571 BTC x 100%

= 100 USDT / 143.45 USDT x 100% = 69.71%

 

What is the Max Loan Amount ?

The Max Loan Amount is the maximum amount that users can borrow from Tokenize Xchange based on their current tier. More information can be found inside the Credit Scoring Tier table:

 

Credit Scoring Tiers

Crypto Loan will be divided into 4 tiers. All default user would start with tier 1.

Tiering	Initial LTV	Liquidation LTV	Maximum Loan Amount
1	30%	50%	100,000 USD
2	40%	60%	500,000 USD
3	55%	75%	1,000,000 USD
4	60%	More than 75%	-Based on request and approval on additional due diligence done       ( users  have to go through our management's approval )

-The credit score will increase one tier if:

• Borrowings does not exceed Liquidation LTV set within the tier

• Borrowings does not exceed max loan amount

• 2 months good record period ( the period when user have loan/s but does not exceed Liquidation LTV or max loan amount threshold )

-The user credit score will decrease if:

• Exceeds Liquidation LTV set within the tier

• Exceed max loan amount

• However, if the current user is at Tier 1, and is exceeding the Liquidation LTV, we will prompt the user to top up collateral.

 

When will Tokenize Liquidate your Assets ?

This will happen when either the LTV reaches liquidate limit , or your borrowed value reaches Maximum Loan Amount. liquidation will take place with an additional 5% penalty fee imposed with part of your collateral sold off to fulfill this liquidation.

Do take note credit scoring will also be affected when this happens.

 

Liquidation

• Users will start with fixed Initial LTV. When the LTV ratio reaches the Margin Call LTV level, users will receive a Margin call notification via email and SMS, prompting users to add collateral to reduce the risk of liquidation.

• When the LTV ratio reaches the Liquidation LTV level, it triggers a forced liquidation on the user's collateralized assets. After this, a liquidation call notification via email and SMS will be sent out to notify users.

• Liquidation will clear all debt and is done at 105% USD Value of user's borrowed.

Tier	Initial LTV	Margin Call LTV	Liquidation LTV
1	30%	40%	50%
2	40%	50%	60%
3	55%	65%	75%

 

How do users prevent liquidation?

• Users can adjust down LTV by topping up collaterals.

• Users can also adjust down LTV by repaying borrows.

How can users repay a loan?

• Users can repay it with the coins they borrowed. 

• LTV will change according to repayment.

How to withdraw collateral?

• Users can only withdraw collateral if it does not reaches initial LTV of their current tier.

• The collateral amount will be credited back to user's Tokenize Spot Wallet.

Collateral accepted: 

Refer to Lending Rate Distribution table

 

Assets available to be borrowed: 

Refer to Borrowing Rate Distribution table

 

Lending Rate Distribution

Asset	Minimum Deposit Qty	(without 200 TKX)	(with 200 TKX)
BTC	0.01	1%	5%
ETH	1	1%	5%
USDT, USDC, DAI	1,000	1%	5%
TKX	100	0.5%	3%

 

Borrowing Rate Distribution

Asset	Borrowing Rate (w/o 200 TKX)	Borrowing Rate (with 200TKX)
BTC	9%	6%
ETH	9%	6%
USDT, USDC, DAI	9%	6%
TKX	9%	6%
DOT	9%	6%
BCH, LTC, XRP, LINK, AAVE, SNX, SUSHI, CRV, UNI, XLM, ZIL, MKR, YFI, BAND, UMA, REN, KSM, COMP,SOL, NEO, ADA, DOGE, AUDIO, ICP, BAT,BAL, GRT, 1INCH, THETA, MATIC, VET, ATOM, HBAR, ONE, SRM, AXS, SLP	9%	6%

Commonly Asked Questions 

1) Where do tokens inside Asset to supply derive from?  

They are actually the tokens in your Tokenize Spot Wallet. Tokens that are staked inside Tokenize Earn programs, in orders or those in algorithm programs do not constitute these tokens. 

 

2) If I do not switch on "Collateral" for those tokens that I have deposited into this program, what will happen to them?

We will provide the allocated APY% for these tokens similar to crypto earn and the payout will be credited to your Tokenize wallet at the beginning of the month.

 

3) Are we able to deposit more than one token type?

Yes, that can be done but do refer to the lending rate distribution table for the token type available for this. 

 

4) Can I have more than one token type borrowed at the same time ? What are the factors that allow me to do so ?

Yes, that can be done as long as you do not exceed the initial LTV computed and the Maximum Loan Amount of your current tier. 

 

5) Under Asset to supply, what does the additional 200 TKX mean and what happens if I select this option? 

TKX staking refers to depositing an additional 200 TKX along with your base asset.  With the additional 200 TKX , the APY% earned on your tokens deposited will increase. The additional 200 TKX will be taken from your Tokenize Spot Wallet. 

 

E.g. Depositing USDT alone will earn an APY% of 2%

Depositing USDT along with 200 TKX will earn a higher APY% of up to 5%

 

Here is how to do it. After you have deposited your tokens, click on the three dots beside Withdraw, and click on Stake TKX

Click Confirm to stake your tokens for higher APY% with 200TKX.

 

200TKX will appear under TKX Staking, indicating that the pairing is successful. 

6) Under Asset to borrow, what does the additional 200 TKX mean and what happens if I select this option? 

With an additional 200 TKX tokens from your own account , the APY% of your tokens borrowed will decrease and these 200TKX tokens will be considered as part of the loaned tokens. 

 

Here is how to do it. After you have borrowed tokens, click on the three dots beside Repay and click Stake TKX

 

This pop-up will appear. Click on Confirm:

 

The APY% rate is now changed from 9% to 12%.

 

 

7) How is the payout for the collateral computed and when will it be distributed ?  

Collateral is computed based on the lowest amount of collateral in place with and to be deposited for a full 24hours/full day. Payout will be credited on a daily basis at the beginning of the next coming day 0200 SGT timing. 

 

8) How is the interest for borrows computed and when will it be added ?  

Interest will be computed based on total borrow amount in the day at any point of time and as long as there are borrows in a day for any time duration it will constitute as one day of interest. This will be added into your borrows at the next coming day on 0200 SGT timing.  

 

Common Loan Scenarios:

 

Example 1 :

At Tier 1 where Maximum loan value is USD100,000 and initial LTV is 40%. User deposited and on collateral for USD100,000 worth of tokens ( Tier 1 maximum USD maximum loan amount ) . He borrowed USD30,000 of tokens in return

LTV level	Initial	Margin Call	Liquidate
Max Limit	40%	50%	60%
USD Value	40,000	50,000	60,000

Due to market movements, the value of tokens borrowed reaches USD50,000 / 50% LTV and user is notified on it.

User decided to increase collateral and repay partial of his borrows and the new/adjusted LTV dropped to less than 40%/ initial LTV.

Some market movement for the coming months but USD value of borrowed did not exceed Margin call or maximum loan value of USD100,000. 

Moving down for another 2 months since user first borrowed, system will upgrade user to next tier as account did not hit Liquidate LTV or Max Loan limit during 2 months period.

 

Example 2:

A continuation from Example 1.

User is currently on Tier 2. The maximum loan amount is now USD500,000 and the new LTV is as below. The value of his borrowed is currently valued at USD100,000 at this point of time. 

LTV level	Initial	Margin Call	Liquidate
Max Limit	50%	60%	70%
USD Value	250,000	300,000	350,000

Down the line due to market movements, the value of tokens borrowed reaches Margin call USD300,000 / 60% LTV and user is notified on it.

User take no action thinking the token value might drop further going lower than Margin call. However further market movement resulted in his borrows reached USD350,000/70% . Liquidation on his collaterals will take place at 105% USD worth of his borrows. 

User is notified on liquidation thereafter.

System will automatically downgrade user back to tier 1 as liquidation have taken place. 

 

Example 3 :

At Tier 1 where Maximum loan value is USD100,000 and initial LTV is 40%. User deposited and switch collateral USD300,000 worth of tokens. He borrowed USD50,000 of tokens in return.

LTV level	Initial	Margin Call	Liquidate
Max Limit	40%	50%	60%
USD Value	120,000	150,000	180,000

Due to extreme market movements, the value of tokens borrowed reaches 150,000 / 50% LTV and user is notified on it.

User decided not to take any action thinking that the token value will drop very soon. 

The market movement start to go up further instead and reaches 60%/USD180,000 value of the tokens he borrowed.

Liquidation of user's collateral will take place based on 100% USD value of his borrows and and additional fee of 5% based on his borrows ( total 105% USD value of his borrows). User will also be notified after this is been done.

If LTV level does not reach liquidate limit in 2 months ( starting from next day onwards) system will increase to tier 2 there after this mentioned period. 

 

 

Example 4 (to avoid)  :

At Tier 1 where Maximum loan value is USD100,000 and initial LTV is 40%. User deposited and switch collateral for USD1,000,000 worth of tokens. He borrowed up to USD99,800 of tokens in return.

LTV level	Initial	Margin Call	Liquidate
Max Limit	40%	50%	60%
USD Value	400,000	500,000	600,000

LTV will be showing at very low risk as LTV% is borrowed/collateral value is 99,800/1,000,000 = 9.98%.

However this is still very risky as account is extremely prone to possible instant liquidation where  Borrowed/Max loan value is USD99,800/USD100,000 = 99.8% as it will only take another 0.2% USD value of market movement where the system will execute instant liquidation even if it is not even half of Initial LTV value. 

 

In summary, liquidation will take place when the LTV % have reach either Liquidation level or maximum load limit.

Tier Level will be upgraded if liquidation does not occurs 2 months after first borrow and it also drop if liquidation occurs on current tier ( if user is more than 1st tier).