In both the single and dual asset borrow models of market neutral yield farming, we are required to deposit collateral in order to borrow assets against that collateral. The Loan-to-Value (LTV) ratio will impact the net APR or Return on Capital for the end user. A higher LTV ratio will result in more capital being borrowed and deployed into the yield farm, and therefore higher returns. A lower LTV will result in less capital being borrowed and deployed into the yield farm, and therefore lower returns.
We have historically viewed ~50% LTV ratio as being reasonable to use; however, at BoF’s discretion, it is possible via our admin panels to alter the LTV ratio.
