Assessing Loan Risks

Depending on the volatility of the reserve assets/collateral assets, a safe loan/vault can become at risk depending on Acala Dollar outstanding debt and the amount of collateral locked. Ensuring that the loan/vault is safe from liquidation is entirely in the hands of each loan owner.

Monitor Your Loan

  • Each loan can be looked up using the collateral asset type e.g. DOT and the owner address using loans.positions query. So you can monitor your loan positions without logging into with your wallet.

  • Have convenient access to you loan, especially during volatile periods of the market

  • Set up price alerts for the loans to notify you as Liquidation Price is approaching

  • The Required Collateral Ratio is already a safety buffer above the Liquidation Ratio, you can use it as a target collateral ratio or set up your own target, to monitor and keep the loan safe.

Reduce Loan Risks

  • Set aside assets as emergency funds to payback Acala Dollar loan or add additional collaterals

  • Unwind loan by withdrawing some collateral asset, sell them for Acala Dollar, and pay down the loan until the Liquidation Price is at a comfortable level. This is only possible if your Current ratio is above the Required collateral ratio

  • Auto close vault by selling collateral: you can use this feature to let the protocol automatically sell off a portion of the collateral on AcalaSwap for Acala Dollar, then pay back and close the vault.

Last updated