Yamp lowers the risk of collateral being liquidated by using 100% value- matched collateral.
If prices drop, the borrower’s collateral is at risk of liquidation.
With any collateralized DeFi loan there is a risk that the price of the collateral may drop below the value of the loan. When this happens, the collateral is liquidated to repay the lender. This is a major risk to the borrower.
Yamp’s layered collateralization allows better liquidation thresholds than popular platforms like Maker and Compound, even on loans without leverage.
This works because Yamp loans are 100% collateralized by LP tokens that are strictly matched in value to the assets borrowed.