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

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

*Do take note that the Loan program is only available for Accredited Investor and Institutional users of the tiered memberships.

 

Getting Started with Crypto Loan

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

You will come to the below page:

Scroll down to the bottom of the page.

• Assets to supply will be the the cryptos that can be utilized for this program (taken from your Tokenize spot wallet)
• Assets to Borrow are those that can be loaned from this program.

Using TKX as an 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.

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 the 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 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 09:00 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 in the Credit Scoring Tier table:

Credit Scoring Tiers

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

Tiering	Initial LTV	Liquidation LTV	Maximum Loan Value
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 has 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 value
• 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	Maximum Loan Value
1	30%	40%	50%	USD 100,000
2	40%	50%	60%	USD 500,000
3	55%	65%	75%	USD 1,000,000

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 reach initial LTV of their current tier.
• The collateral amount will be credited back to user’s Tokenize Spot Wallet.

Asset available for Supply	Assets Available for Borrows
BTC, ETH, USDT, USDC, DAI	BTC, ETH, USDT, USDC, DAI, TKX, XSGD, DOT, 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

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 each day upon reaching 24 hours the supplies are deposited.

 

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?

You can deposit an additional 200 TKX along with your base asset by doing so the APY% earned on your tokens deposited will increase. Do note that this additional 200TKX under the main assets generates zero APY%.

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% but there is 0% APY given to the 200TKX.

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

 

6)Is it possible to withdraw collateral and use the proceeds to repay the loan?

Yes, that can be done if the LTV post-withdrawal remains within the initial LTV.

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 200 TKX 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?  

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

Note that the payout is based on simple interest computation.

 

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

Interest will be computed based on the 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 to your borrows at the next coming day on 0200 SGT timing.

Note that the interest for borrows is computed based on compounded interest.

 

Common Loan Scenarios For Illustration Purpose:

Case Scenario 

At Tier 1, the user deposits and switches collateral for USD100,000 worth of BTC and borrows USD20,000 of  USDT tokens in return.

LTV at start = (borrows + interest) /Collateral)) X100% = ((20,000 +0)/100,00) X 100% = 20%

LTV level	Initial	Margin Call	Liquidate
Max Limit ( Base on collateral)	30%	40%	50%

Tier 1 maximum borrow value = USD100,000.

Down the road the borrowed value increases due to hike in BTC prices + increase in accrued interest resulting in a new LTV as per below:

Latest LTV = (borrows + interest) /Collateral)) X100% = (40,000)/100,00) X 100% = 40%

This actually reaches the margin call and the user will be notified of the situation.

 

Outcome 1:

The user takes no further action and the LTV increases from 40% to 50%.

Liquidation on his collaterals will take place at 105% USD worth of his current borrows value at this point of time.

The user is notified of liquidation thereafter.

 

Outcome 2:

The user takes no further action. Due to further market fluctuation, the value of his borrows (including interest) reaches USD100,000 the maximum loan value in Tier 1.

Liquidation on his collaterals will take place at 105% USD of his current borrows value at that point in time.

The user is notified of liquidation thereafter.

 

Outcome 3:

The user decided to increase his collateral and the LTV dropped from 40% back to 30%. There is no drastic fluctuation in the market and the LTV remains stable around 30% for the next 2 months. The Tier level for users will be upgraded from Tier 1 to Tier 2.

LTV level	Initial	Margin Call	Liquidate
Max Limit	40%	50%	60%

Tier 1 maximum borrow value = USD500,000.

 

In summary, liquidation will take place when the LTV % has reached either the Liquidation level or the maximum loan limit.

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