Blog Getting started Pool your portfolio for crypto, fiat loans on MyConstant.

Pool your portfolio for crypto, fiat loans on MyConstant.

date June 10, 2020 time 5 min read 473 views

A diverse portfolio should be rewarded. That’s why today we’re letting you use multiple cryptos as collateral for individual Crypto credit and Crypto-backed loan orders.

A multi-collateral credit line lets you pool the total value of your crypto portfolio as backing for loans. Pool together $2000 in BTC and $1000 in ETH for a $2000 loan. Or put together as many coins as you need to meet your 150% loan to value ratio.

How it works

The loan amount you’re now eligible to receive is based on the total value of the cryptos you currently have in your MyConstant wallet. If you want to get a larger loan, you’ll need to deposit more crypto into your wallet.

You’ll notice on our Pro page there is no longer a collateral selection option. In multi-collateral loans, collateral is automatically allocated by a priority system based on the highest 24-hour coin volume on Binance.

For example

Say you have BTC, ETH, and WTC in your MyConstant wallet and their 24-hour volume on Binance goes, in order, BTC then ETH then WTC. We would prioritize securing your loan with BTC first.

If the loan collateral requirement is higher than the amount of BTC in your wallet, then our system then tries to back your loan with both BTC and ETH. If there still isn’t enough collateral between the BTC and ETH, then we continue down the list and lock in your WTC.

A new overview

In the Loan tab of your account page, you’ll see a new Overview tab.

You should see 4 sections.

1. Available credit

Shows the total amount of money (in USD) available to borrow with your collateral balance

2. Total debt

Shows the total amount of money you owe including interest.

3. Collateral value

Shows the LTV ratio of your loans to total collateral.

Note: Instead of tracking your collateral on a per-loan basis, we now track your collateralization based on your total number of loans.

This way, you no longer need to keep track of individual collateral levels locked into each loan. You only need to make sure that your total collateral level is always high enough to cover the sum of your loans.

4. Average interest

Shows the average interest rate you’re paying across all your loans.

You’ll also see three buttons at the end of the row: Deposit, Recall Excess, and Auto Top-up.

Here you can deposit collateral directly from your wallet, recall excess collateral to your Available balance, or toggle Auto top-up. More info on that below.

Topping-up your loan

Multi-collateral loans let you top-up your reserves with any crypto in your Coin Balance. To manually top-up from your Available Balance, simply select the Top-up button next to the desired crypto and select the amount you’d like to send.

If you choose to Auto Top-up your loans from the Overview screen, crypto will automatically be sent from your available balances in your wallet. This is again based on priority by 24-hour volume on Binance.

Liquidation

If the combined total value of all collateral falls under 110% of your combined loan value, we’ll begin liquidating collateral to cover your loans.

Like with our Top-up feature, we liquidate collateral in order of 24-hour volume on Binance. That usually means your BTC is the first to go. Make sure you enable Auto Top-up if you want to make sure you aren’t liquidated in a flash crash.

Repayment

When you repay your multi-collateral loans, you still need to submit payments for each loan separately. You can pay with fiat as normal, but if you choose to repay with collateral we will again select collateral to be repaid based on 24-hour Binance volume priority.

Switching back to single collateral (Isolate)

If you have multiple collaterals in your portfolio you can choose to isolate a loan so that it is backed by one collateral (like in our original system). To do this, go to the loan menu in your Accounts tab and you should be able to see the Isolate button next to your loan.

Click this button and select which crypto you wish to isolate and the amount.

Note: You can only isolate if you have enough crypto to cover at least 110% of the loan value and isolating won’t drop your collateral rate or value for your multi-collateral loans below 110% (for more on collateral rate look at our FAQs).

Once you isolate a loan it cannot be changed back to single collateral.

FAQS

Is it still possible to take out a single-collateral loan?

Yes. After you take out a loan you can click on the Isolate button in the loan menu on your accounts page to switch to a single-collateral loan. To switch you must meet the 110% minimum collateral value requirement for the crypto. However, you cannot collateralize with more crypto than your collateral rate allows (more on that below).

Is repayment any different with multi-collateral credit lines?

Nope! You must still repay each loan individually. However, crypto selected for collateral repayments will still follow a 24-hour trading volume priority based on what you have available.

I can’t find where to choose multiple collaterals for my borrow order

If you take out a crypto-backed loan or buy new cryptos using Crypto Credit, you’ll only see the option to use one collateral. To borrow with multiple collaterals you must start on our pro page.

Why do you prioritize collaterals based on 24-hour exchange volume?

Loan security is our top priority on MyConstant. In the unfortunate case of liquidation, we always want to make sure we can sell collateral as fast as possible to cover the loan value.

Will auto top-up add collateral to my loan based on 24-hour exchange volume?

Yes.

Can I choose to auto top-up some loans and manually top-up others?

No. You can only toggle auto top-up on or off for all multi-collateral loans at the same time. However, you can choose this setting separately for each isolated (single-collateral) loan.

Will I still receive notifications to repay individual multi-collateral loans on schedule?

Yes.

Do you have a feature for paying all loans in one term period at the same time?

Right now you still must pay off all of your loans individually.

If I have multiple active loans, which collaterals do I get back when I repay my earliest loans?

If you still have active loans after repaying, your collateral won’t be released back to your available balance. Instead, it will go into your collateral balance for multi-collateral. If you want to remove collateral from this balance, you’ll need to recall excess from the overview screen and choose the crypto type and amount you want.

I can’t recall excess on my crypto even though my collateral value is over 110%.

Collateral value is only used to determine loan liquidation. It is calculated by: 

(number of coins * value)+”repeat for each coin”/(loan value + up-to-date interest + matching fee)

We calculate how much collateral you can withdraw through recall excess based on the collateral rate. For more information on the collateral rate, see the FAQ below.

What is the collateral rate and why is it different from the collateral value?

Collateral rate and collateral value are different concepts.

Collateral value only takes into account the monetary value of your collateral in your collateral balance compared to your loan amount. We base liquidation off of collateral value.

Your collateral rate is a more in-depth number that takes into account the LTV ratios required for different cryptocurrencies. We use this number to determine how much you can withdraw with recall excess as well as the maximum amount of crypto you can place in an isolated loan.

You can find your collateral rate through this equation:

x = (crypto amount)*(crypto value)*(LTV)+“repeat for each crypto collateral”

Collateral rate = (x/(x+additional interest+matching fees))*100

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Peter Upton

Peter Upton

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