> For the complete documentation index, see [llms.txt](https://docs.port.finance/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.port.finance/port-finance-variable-rate-lending/terminologies.md).

# Terminologies

For each assets that Port Finance supports, it has the following parameters:

* **Loan to Value Ratio**: the max ratio between loan to collateral that the users are allowed to borrow
* **Liquidation Threshold**: the ratio between loan to collateral at which the collateral can be bought by liquidator at a discount
* **Liquidation Bonus**: the discount at which the liquidator can come in and buy the collateral
* **Borrow Fee**: the fee that is changed to the protocol
* **Flash Loan Fee**: the fee percentage that is charged for flash loan

For each wallet they have the following statistics:

* **Total borrowing power**: the total monetary value in USD that the users are allowed to borrowed
* **Risk factor**: represents the safety of the your deposited asset against borrowed assets, the higher the risk factor the riskier is your loan. When the risk factor reaches 100%, your loan will be liquidated.
* **Loan to Value ratio**: the ratio of how much users have borrowed compared to their deposited asset

Concretely, the above statistics are calculated as followed:

$$
Total BorrowPower
\= \Sigma\_{collateral} LTV\_{collateral} \* MarketValue\_{collateral}
$$

$$
RiskFactor = \frac{ \Sigma\_{borrow}  MarketValue\_{borrow}}{ \Sigma\_{collateral} LiquidationThreshold\_{collateral} \* MarketValue\_{collateral}}
$$

$$
LTV = \frac{\Sigma\_{borrow}  MarketValue\_{borrow}}{\Sigma\_{collateral} LTV\_{collateral} \* MarketValue\_{collateral}}
$$


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