Risk Profile

Soft Liquidation Risk: Because collateral is the LP itself, which already contains 50% of the borrowed asset, LVF positions remain relatively stable under modest price shifts.

Directional Exposure: LVF allows users to stay fully exposed to the upside of their pTKN while still accessing yield from the paired asset.

Interest Rate Volatility: Rates are dynamically set based on lending pool utilization. High demand or low supply will drive interest costs up.

Liquidation Mechanism: If price volatility pushes LTV above the threshold, the LP is liquidated and the borrowed asset repaid. Liquidations follow a partial repayment model to preserve remaining collateral for the user.