Liquidity

Liquidity describes how easily an asset converts to cash without moving the market price. Bitcoin and Ethereum are highly liquid — you can move millions of dollars through major exchanges with minimal slippage. Small-cap altcoins and most NFTs are illiquid: a $50,000 sell order can crash the price 20%+.

For lending purposes, liquidity determines what collateral a lender will accept. Illiquid collateral can't be reliably liquidated if a margin call goes unmet, so lenders either reject it or require huge LTV cushions.

Why it matters for Milo customers

Milo's collateral standards (BTC and ETH only) directly reflect liquidity requirements. Both assets have deep institutional markets that can absorb large sales without disrupting price discovery. This is why your collateral can be sized close to the loan amount without exotic LTV haircuts.

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