LLTV

What it actually means

LLTV stands for Liquidation Loan-To-Value. It is the level your loan-to-value ratio can reach before your position can be liquidated. Your loan-to-value is simply your borrowed value divided by your collateral value. When that ratio rises to the market's LLTV, the position crosses into liquidatable territory and anyone can repay part of your debt in exchange for your collateral.

The important thing about Morpho Blue is that each market is immutable and isolated, and each one is created with a single fixed LLTV. A market is defined by one collateral asset, one loan asset, an oracle, an interest rate model, and one LLTV. That parameter never changes for the life of the market. This is different from Aave, where liquidation thresholds are set per asset at the protocol level and can be adjusted by governance over time.

How it is calculated

A position is liquidatable when its loan-to-value reaches the market LLTV:

The same parameter sets your maximum borrow. With collateral worth C in a market with a given LLTV, the most you can borrow at the edge is C multiplied by LLTV, though borrowing right up to that line means you are liquidatable from the first adverse price tick. Morpho Blue offers a discrete set of LLTV values per collateral and loan pairing, for example 86%, 91.5%, or 94.5% depending on how correlated and liquid the two assets are. Higher LLTV markets are typically used for tightly correlated pairs like a stablecoin against another stablecoin or a staked token against its underlying.

Why it matters to you

LLTV is the single number that defines how much room a Morpho Blue position has before liquidation. The trade-off is direct:

• Higher LLTV means more capital efficiency, since you can borrow more against the same collateral.
• Higher LLTV also means a thinner safety buffer, since a smaller price move closes the gap to liquidation.
• Because the LLTV is fixed per market, you choose your risk level by choosing which market to borrow in, not by adjusting a setting later.
• A market built for correlated assets can safely carry a high LLTV, while the same LLTV on volatile collateral would be dangerous.

Real example

You supply $10,000 of wstETH as collateral in a Morpho Blue market with an LLTV of 94.5%, borrowing WETH against it. The maximum borrow at the edge is $10,000 times 0.945 = $9,450. You borrow $8,000, putting your loan-to-value at 80%, comfortably below the 94.5% line. If wstETH falls relative to WETH and your loan-to-value climbs to 94.5%, the position becomes liquidatable and a liquidator can step in. The high LLTV is appropriate here because wstETH and WETH move closely together, so the buffer, while thin in percentage terms, is rarely tested by ordinary volatility.

Common misconceptions

LLTV is not the same as the loan-to-value you should target. It is the ceiling, not the recommendation, and borrowing close to it leaves no room for price movement. It is also a mistake to read a high LLTV as a sign of a safe market. A 94.5% LLTV only makes sense when the collateral and loan assets are tightly correlated. Finally, LLTV does not change with governance the way an Aave liquidation threshold can, because a Morpho Blue market is immutable once deployed.

How Otomato monitors it

Otomato detects your Morpho Blue positions automatically, with no setup, and reads each one against the exact LLTV of the market it lives in rather than a generic threshold. The default rules alert you as your loan-to-value approaches that market's LLTV, when the oracle price moves your collateral closer to the line, and when the borrow rate shifts the economics of the position. You only get an alert when the distance to liquidation materially narrows. Silence means your loan-to-value is still well clear of the LLTV.

Monitor this in your portfolio

Otomato detects your positions automatically and alerts you only when something material changes. No setup, no signatures.

App StoreGoogle Play

Or try on Telegram