This page covers JLP Loans: how to borrow USDC against your JLP, the LTV thresholds, how the borrow rate works, and how liquidation is handled.
What is JLP Loans? JLP Loans allows users to deposit JLP tokens as collateral to borrow USDC. The position continues to earn JLP yield while the loan is active, allowing users to access liquidity without exiting their JLP position.
The protocol uses an overcollateralized lending model with dynamic interest rates based on utilization.
Key Parameters Parameter Value Collateral JLP Borrowable asset USDC Maximum LTV 90% Liquidation LTV 95% Liquidation fee 2% of liquidated collateral
Loan-to-Value (LTV) The Loan-to-Value (LTV) ratio represents the ratio between your outstanding debt and the USD value of your JLP collateral.
L T V = O u t s t a n d i n g D e b t ( U S D ) / J L P C o l l a t e r a l V a l u e ( U S D ) LTV = Outstanding Debt (USD) / JLP Collateral Value (USD)
L T V = O u t s t an d in g De b t ( U S D ) / J L PC o ll a t er a l Va l u e ( U S D ) LTV Thresholds Threshold Value Meaning Maximum LTV 90% Maximum you can borrow against deposited collateral Liquidation LTV 95% LTV at which the position becomes eligible for liquidation
Example With $10,000 worth of JLP deposited:
Action Amount LTV Maximum initial borrow $9,000 90% Liquidation threshold $9,500 debt 95% Recommended safe borrow $6,500 65%
Position Management Each user holds a single lending position, which displays:
My Collateral — JLP deposited as collateralMy Debt — outstanding debt (principal + accrued interest) in USDCLiq. Price (JLP) — the estimated JLP price at which the position will be liquidatedLTV — current loan-to-value ratio
Borrow Rate The borrow APR is dynamic and adjusts based on pool utilization. Higher utilization means a higher borrow rate.
U t i l i z a t i o n = ( L o c k e d f o r T r a d i n g + T o t a l B o r r o w e d ) / T o t a l P o o l S i z e Utilization = (Locked for Trading + Total Borrowed) / Total Pool Size
U t i l i z a t i o n = ( L oc k e df or T r a d in g + T o t a lB orro w e d ) / T o t a lP oo lS i ze Show Rate Calculation (code)
// When utilization ≤ 80% (linear curve) Rate Increase = (Target Rate - Min Rate) × Utilization / Target Utilization Yearly Rate = (Min Rate + Rate Increase) × 10^9 / 10,000 // When utilization > 80% (jump rate curve) Rate Diff = Max Rate - Target Rate Util Above Target = Utilization - Target Utilization Remaining Cap = 10^9 - Target Utilization Extra Rate = (Rate Diff × Util Above Target) / Remaining Cap Yearly Rate = (Target Rate + Extra Rate) × 10^9 / 10,000 // Convert to hourly and APR Hourly Rate = Yearly Rate / (24 × 365) Borrow APR = (Hourly Rate / 10^9) × 24 × 365 × 100
The specific rate parameters (jumpRateState, borrowsFundingRateState) are defined per custody account. Liquidation Liquidation is triggered when a position’s LTV exceeds the Liquidation LTV of 95% . Only whitelisted keepers can execute liquidations.
Partial Liquidation When a position exceeds the liquidation threshold but is not critically under-collateralized, the protocol performs a partial liquidation:
Repays a portion of the outstanding debt
Burns only the required amount of JLP collateral
Brings the position back toward a safer LTV range
Allows the user to retain the remaining collateral and position
Partial liquidation is only triggered when the position size exceeds a minimum liquidation size, to avoid dust liquidations.
Full Liquidation A full liquidation is triggered when:
The position’s LTV significantly exceeds the liquidation threshold (approximately 97%+)
Market volatility is extreme
Partial liquidation alone would be insufficient to restore solvency
Full liquidation repays the entire outstanding debt, burns the necessary JLP collateral, and returns any remaining collateral to the user after fees.
Liquidation Fee A 2% fee is applied to the liquidated collateral. This fee is deducted from the collateral burned and deposited into the JLP pool as protocol revenue.
If your position is fully liquidated, you may lose a significant portion of your deposited JLP collateral. Monitor your LTV regularly, especially during periods of JLP price volatility. You can avoid liquidation at any time by depositing additional JLP collateral or repaying part or all of your outstanding debt.
