In this article, you will learn:
- How to calculate the max borrow limit of Cross Margin Pro
- Two examples of Max borrow amount calculation
How to calculate the Max Borrow Limit
The Cross Margin Pro maximum borrow limit is determined by your available margin amount. The maximum borrow amount of each token = Available Margin Amount / Initial Margin Rate of that token. See the examples below on how maximum borrow amounts are calculated.
Example 1: A single liability coin with a single leverage tier
Note: The illustration below is a purely hypothetical example to demonstrate how Margin Level and Collateral Margin Level are calculated, as well as their impacts, in the Cross Margin Pro mode.
To calculate the maximum amount that can be borrowed for a specific liability coin and the Margin Level in the Cross Margin Pro mode, both the tiered collateral ratio and the Liability Coin Leverage table are required. Suppose the hypothetical collateral ratio and the liability coin maintenance/initial margin rate are as follows. Also, assume that the Interest is zero.
Liability Coin | Tier | Max. Leverage | Liability Value in USDC | Maintenance Margin Rate | Initial Margin Rate |
BTC | 1 | 10x | 0 - 1,000,000 | 2% | 11.12% |
2 | 8x | 1,000,000 - 2,000,000 | 3% | 14.29% | |
3 | 5x | 2,000,000 - 3,000,000 | 4% | 25% | |
4 | 3x | 3,000,000 - 4,000,000 | 5% | 50% | |
USDC | 1 | 10x | 0 - 1,000,000 | 3% | 11.12% |
2 | 8x | 1,000,000 - 2,000,000 | 4% | 14.29% | |
3 | 5x | 2,000,000 - 3,000,000 | 5% | 25% | |
4 | 3x | 3,000,000 - 4,000,000 | 6% | 50% |
Collateral Coin | Tier | Amount | Collateral Ratio |
BTC, USDC | 1 | 0 - 1,000,000 | 1 |
2 | 1,000,000 - 2,000,000 | 0.975 | |
3 | 2,000,000 - 3,000,000 | 0.95 | |
4 | 3,000,000 - 4,000,000 | 0.9 | |
5 | 4,000,000 - 5,000,000 | 0.85 |
Suppose under the current scenario, User A initially has 1 BTC, and has already borrowed 1 BTC.
User A’s Coin Holding | Position | Liability | Index Price |
BTC | 2 | 1 | 10,000 |
USDC | 0 | 0 | 1 |
The below table demonstrates, in the current scenario and after reaching the maximum borrowable amount of USDT, how the Cross Margin Pro mode’s Margin Level, Collateral Margin Level, and maximum borrowable amount in USDT are calculated, as well as their impacts.
Basic Parameters for Further Calculations
Borrow 10,000 USDC | Borrow 89,928 USDC (The Max. Borrowable Amount) | ||
In USDC | ∑Asset | = 2 * 10,000 = 20,000 USDC | = 2 * 10,000 + 79,928 = 99,928 USDC (2 BTC and 79,928 USDC) |
∑Collateral Value | = 2 * 10,000 * 100% = 20,000 USDC | = 2 * 10,000 * 100% + 79,928 * 100% = 99,928 USDC | |
Total Liability | = 10,000 USDC | = 10,000 + 79,928 = 89,928 USDC (1 BTC and 79,928 USDC) | |
∑Net Equity | = 20,000 - 10,000 = 10,000 USDC | = 99,928 - 89,928 = 10,000 USDC | |
∑Initial Margin | = 10,000 * 11.12% = 1,112 USDC | = 10,000 * 11.12% + 79,928 * 11.12% = 10,000 USDC | |
∑Maintenance Margin | = 10,000 * 2% = 200 USDC | = 10,000 * 2% + 79,928 * 3% = 2,597.84 USDC |
Margin Level Calculation
Margin Level | = ∑Net Equity / ∑Maintenance Margin = 10,000 / 200 = 50 | = ∑Net Equity / ∑Maintenance Margin = 10,000 / (10,000 * 2% + 79,928 * 3%) = 3.849 |
Margin Level Health Status | Margin Level > MCR The account is low risk | Margin Level > MCR The account is low risk |
Collateral Margin Level Calculation
Collateral Margin Level | = ∑Collateral Value / Total Liability = 20,000/10,000=2 | = ∑Collateral Value / Total Liability = 99,928 / (10,000 + 79,928) = 1.11 |
Transfer Status | Collateral Margin Level = 2 The user is restricted from transferring funds out of the margin account. | Collateral Margin Level < 2 The user is restricted from transferring funds out of the margin account. |
Max Transfer Out Amount | 0 | 0 |
Convert to Cross Margin Classic (5X) | Yes Collateral Margin Level > 1.25 | No Since ∑Asset/∑Liability = 1.19, Collateral Margin Level < 1.25 |
Available Margin Amount and Borrowable Amount
Available Margin Amount | Available Margin Amount will be displayed at the wallet page. = Max (∑Net Collateral - ∑Initial Margin, 0) = Max (∑Collateral Value - ∑Liability - ∑Initial Margin, 0) = Max ( 20,000 - 10,000 - 1,112, 0) = 8,888 USDC | Available Margin Amount will be displayed at the wallet page. = Max (∑Net Collateral - ∑Initial Margin, 0) = Max (∑Collateral Value - ∑Liability - ∑Initial Margin, 0) =Max (99,928 - 89,928 - 10,000, 0) = 0 USDC |
| Additional BTC max borrowable amount | = Available Margin Amount / Initial Margin Rate = 8,888 / 11.12% = 79,928 USDC With the same asset amount, the borrowable amount is higher than in the Cross Margin Classic mode. | = Available Margin Amount / Initial Margin Rate = 0 |
Example 2: Liability coins impacted by leverage tiering and collateral haircuts
Note: The illustration below is a purely hypothetical example to demonstrate how Margin Level and Collateral Margin Level are calculated, as well as their impacts, in the Cross Margin Pro mode.
To calculate the maximum amount that can be borrowed for a specific liability coin and the Margin Level in the Cross Margin Pro mode, both the tiered collateral ratio and the liability maintenance rate are required. Suppose the hypothetical collateral ratio and the liability coin maintenance/initial margin rate are as follows. Also, assume that the Interest is zero.
Liability Coin | Tier | Max. Leverage | Liability Value in USDT | Maintenance Margin Rate | Initial Margin Rate |
BTC | 1 | 10x | 0 - 1,000,000 | 2% | 11.12% |
2 | 8x | 1,000,000 - 2,000,000 | 3% | 14.29% | |
3 | 5x | 2,000,000 - 3,000,000 | 4% | 25% | |
4 | 3x | 3,000,000 - 4,000,000 | 5% | 50% | |
5 | 2x | 4,000,000 - 5,000,000 | 8% | 100% | |
ETH | 1 | 8x | 0 - 2,000,000 | 5% | 14.29% |
2 | 5x | 2,000,000 - 3,000,000 | 8% | 25% | |
3 | 3x | 3,000,000 - 4,000,000 | 10% | 50% |
Collateral Coin | Tier | Amount | Collateral Ratio |
BTC, USDC | 1 | 0 - 1,000,000 | 1 |
2 | 1,000,000 - 2,000,000 | 0.975 | |
3 | 2,000,000 - 3,000,000 | 0.95 | |
4 | 3,000,000 - 4,000,000 | 0.9 | |
5 | 4,000,000 - 5,000,000 | 0.85 | |
ETH | 1 | 0 - 1,100,000 | 1 |
2 | 1,100,000 - 2,100,000 | 0.975 | |
3 | 2,100,000 - 3,100,000 | 0.95 | |
4 | 3,100,000 - 4,100,000 | 0.9 | |
5 | 4,100,000 - 5,100,000 | 0.85 |
Suppose under the current scenario, User A initially has 49 BTC and 49 ETH, and has already borrowed 50 BTC and 50 ETH.
User A’s Coin Holding | Position | Liability | Index Price |
BTC | 99 | 50 | 10,000 |
ETH | 99 | 50 | 1,000 |
The below table demonstrates, in the current scenario and after reaching the maximum borrowable amount of BTC, how the Cross Margin Pro Margin Level, Collateral Margin Level, and maximum borrowable amount in USDC are calculated, as well as their impacts.
Basic Parameters for Further Calculations
Initial Borrow of 50 BTC and 50 ETH | Additional Borrow of 222.50 BTC (The Max. Borrowable Amount) | ||
In USDC | ∑Asset | = 99 * 10,000 + 99 * 1,000 = 1,089,000 USDC | = (99 + 222.50142857) * 10,000 + 99 * 1,000 = 3,314,014.2857 USDC (321.50142857 BTC and 99 ETH) |
∑Collateral Value | = 99 * 10,000 * 100% +99 * 1,000 * 100% = 1,089,000 USDC | = 100 * 10,000 * 100% + 100 * 10,000 * 97.5% + 100 * 10,000 * 95% + 21.50142857 * 10,000 * 90% + 99 * 1,000 * 100% = 3,217,512.85713 USDC Note: ∑Collateral Value is smaller than ∑Asset due to the haircut impact (see the tiered collateral ratio table above) | |
∑Liability | = 50 * 10,000 + 50 * 1,000 = 550,000 USDC | = 272.50142857 * 10,000 + 50 * 1,000 = 2,775,014.2857 USDC (272.50142857 BTC and 50 ETH) | |
∑Net Equity | = ∑Asset- Total Liability =1,089,000 - 550,000 = 539,000 USDC | = ∑Asset- ∑Liability = 3,314,014.2857 - 2,775,014.2857 = 539,000 USDC | |
∑Initial Margin | = 50 * 10,000 * 11.12% + 50 * 1,000 * 14.29% = 62,745 USDC | = 100 * 10,000 * 11.12% +100 * 10,000 * 14.29% + 72.50142857 * 10,000 * 25% + 50 * 1,000 * 14.29% = 442,498.571425 USDC (See the Liability Coin Leverage table above. Total BTC borrow amount is 272.50142857, which falls under Tier 3. ETH borrow amount is 50, also falls under Tier 1) | |
∑Maintenance Margin | = 50 * 10,000 * 2% + 50 * 1,000 * 5% = 12,500 USDC | = 100 * 10,000 * 2% + 100 * 10,000 * 3% + 72.50142857 * 10,000 * 4% + 50 * 1,000 * 5% = 81,500.571428 USDC (See the Liability Coin Leverage table above. ) | |
Margin Level Calculation
Margin Level | = ∑Net Equity / ∑Maintenance Margin = 539,000 / 12,500 = 43.12 | = ∑Net Equity / ∑Maintenance Margin = 539,000 / 81,500.571428 = 6.61345 |
Margin Level Health | Margin Level > MCR The account is low risk | Margin Level > MCR The account is low risk |
Collateral Margin Level Calculation
Collateral Margin Level | = ∑Collateral Value / Total Liability = 1,089,000 / 550,000 = 1.98 | = ∑Collateral Value / Total Liability = 3,217,512.85713 / 2,775,014.2857 = 1.159458 |
Transfer Status | Collateral Margin Level < 2 The user is restricted from transferring funds out of the Margin Account. | Collateral Margin Level < 2 The user is restricted from transferring funds out of the Margin Account. |
Max Transfer Out Amount | 0 | 0 |
Convert to Cross Margin Classic (5X) | Yes Collateral Margin Level > 1.25 | No Since ∑Asset / ∑Liability = 1.19, Collateral Margin Level < 1.25 |
Available Margin Amount
Available Margin Amount | Available Margin Amount will be displayed at the wallet page. = Max (∑Net Collateral - ∑Initial Margin, 0) = Max (∑Collateral Value - ∑Liability - ∑Initial Margin, 0) = Max (1,089,000 - 550,000 - 62,745, 0) = 476,255 USDC | Available Margin Amount will be displayed at the wallet page. = Max (∑Net Collateral - ∑Initial Margin, 0) = Max (∑Collateral Value -∑Liability - ∑Initial Margin, 0) = 0 Since ∑Collateral Value - ∑Liability - ∑Initial Margin = 3,217,512.85713 - 2,775,014.2857 - 442,498.571425 = 0 |
| Additional BTC max borrowable amount | 476,255 / 11.12% = 4,282,599, above the Tier 4 borrow range The maximum borrowing amount for BTC is not as straightforward as in Example 1. You may need to attempt 1-2 times to determine the tier in which the maximum borrowing amount falls, in order to reduce the Available Margin Amount to zero. The Cross Margin Pro mode is more capital-efficient than the Cross Margin Classic mode. With the same net equity amount, the borrowable amount in the Cross Margin Pro mode is higher. | 0 |
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