đ§”ADA vs USDA â Same Loan, Different Risk
Borrowing $100 USDM on Liqwid?
You can use ADA or USDA as collateralâbut your risk exposure isnât the same.
Letâs unpack why.đ

1/ You borrow $100 USDM.
Your Health Factor is set to 2.0, with Safe Mode on.
Hereâs the exact collateral used in both scenarios:
đ” Collateral: 345.98 ADA (at ~$0.29/ADA) â ~$100
đą Collateral: 250.01 USDA (at $1.00) â $250.01
Both yield the same Health Factor⊠but the risk? Not the same.


2/ Why? Price behavior.
âą ADA is volatile. It can drop 10%+ in a day.
âą USDA is stable. Pegged to $1.
Both assets have similar Max LTVs (~80%).
But ADA's price moves, affecting your collateral value and health factor in real time.
USDAâs doesn't, as the collateral value is staying the same.
3/ What happens if the price drops?
Your 345.98 ADA â now worth ~$90
 đ» LTV jumps, Health Factor drops
 â ïž Youâre closer to liquidation
With USDA? No price change â your HF stays steady.
Same loan. Different volatility exposure.
4/ This is why we use Health Factor
LTV tells you where you start.
Health Factor tells you where you're headed.
It reacts dynamically to:
âą Asset price changes
âą Market utilization
âą Borrowed amount
âą Collateral quality
5/ Liqwidâs Risk Framework helps manage this:
Each assetâs LTV is set using:
â
Volatility scoring
â
Liquidity analysis
â
Oracle safeguards
â
Governance oversight
Youâre not flying blind. The system is designed to protect you.
6/ Want to try it yourself?
Head to: đÂ
Choose different collateral types, adjust the sliders, and see how your Health Factor changes in real time.
âïž Borrowing is easy. Managing risk is the real skill.
 Learn the tools. Master the mechanics. Stay in the game.
đ Learn more:
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#DeFi #Cardano #LiqwidFinance #CryptoRisk #HealthFactor
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