| Very interesting read, especially the ELI5 part before the DeFi story. Are the 3 ways explained to cover a margin call how it works in practice? can one choose either of these 3 options? > Fourth grade math. If you have $110 million in assets and $100 million in liabilities you are said to be levered 10:1. Actually got some trouble on the 4th grade math ... morning coffee not working properly? $110m assets - $100m liabilities = $10m of "surplus". liabilities:surplus ratio is 100:10 --> 10:1. > You’ve got $1,600 in assets against $1,000 in debt, so $600 in equity, so ~1.67:1 levered. here liability = 1000, a better name for the surplus is "equity" at 600, 1000:600 ratio --> ~1.67:1 4th grade math checks out :) |