If the collateral assets decrease in value significantly, the client will be warned to add more collateral.
The client will be notified, and small automatic loan repayments will only start after the market value of the collateral has decreased to 120% of the outstanding loan balance. Otherwise said, small automatic loan repayments will start when the Loan-to-Value increases to 83.3%.
E.g. if the loan amount is 10 000 USD then the small automatic loan repayment will be initiated only when the value of your collateral decreases to less than 12 000 USD.
The client will receive a minimum of three notifications (via SMS and email) before that for each 5% decrease starting at 140%. The client will be prompted to deposit more crypto assets into their Nexo account to prevent small automatic loan repayments.
Please note that the Nexo Oracle will not sell all crypto assets at once. Sell orders are executed in small increments only as much as to rebalance the Loan-to-Value back within the limits. Sell market orders are made at the market price on leading cryptocurrency exchanges. The funds received back from the exchange will be instantly applied towards your outstanding loan balancе.