> For the complete documentation index, see [llms.txt](https://docs.pinjamlabs.com/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.pinjamlabs.com/your-guide-to-using-pinjam/basic-functions/collateral.md). # Collateral Different parameters will be set for each asset based on its specific risk profile. Assets with high liquidity, such as stablecoins and ETH, will have a higher loan-to-value (LTV) ratio, which means that users can borrow a larger percentage of their value. The liquidation threshold, which is the point at which a loan is considered unhealthy and may be subject to liquidation, is always higher than the LTV. This ensures that healthy loans are not liquidated unnecessarily. To encourage other users to liquidate unhealthy loans and protect the protocol, a liquidation fee is charged to the user's collateral. A portion of this fee is also placed in the treasury to protect against insolvency in volatile market conditions. In order to limit the potential for bad debt, the supply of certain assets may be capped. --- # Agent Instructions This documentation is published with GitBook. GitBook is the documentation platform designed so that both humans and AI agents can read, navigate, and reason over technical content effectively. Learn more at gitbook.com. ## Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter, and the optional `goal` query parameter: ``` GET https://docs.pinjamlabs.com/your-guide-to-using-pinjam/basic-functions/collateral.md?ask=&goal= ``` `ask` is the immediate question: it should be specific, self-contained, and written in natural language. `goal` is optional and describes the broader end goal you are ultimately trying to accomplish on behalf of the user. GitBook uses it to tailor the answer towards what is most useful for that goal. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.