MarketQQQx
Can liquidators profitably liquidate when needed? When price moves outpace liquidators or collateral lacks liquidity, unprofitable positions become bad debt socialized among lenders. Two axes: volatility and liquidity.
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VolatilityDetermines buffer between Max LTV and Liquidation LTV. Higher volatility → lower Max LTV. Trend (stable/increasing/declining) — spikes trigger Max LTV reductions.
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Liquidity & Price ImpactWhether collateral can be sold without excessive market impact. Critical failure: when price impact exceeds liquidation bonus, liquidations stop being profitable.
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Market CapitalizationContext for other risk metrics. Low-cap → conservative parameters. Watch FDV/circulating-cap ratio — 98% locked supply means future unlocks create selling pressure.
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