Tier defaults
| Tier | LTV | Typical markets |
|---|---|---|
| Conservative | 80% | High liquidity, established |
| Moderate | 65% | Active trading, standard liquidity |
| Risk | 50% | Lower liquidity, higher volatility |
If your collateral is worth 65.
Why tiers exist
Not all prediction market positions have the same liquidity or price stability. Tiered LTV protects lenders by:- Limiting exposure to riskier positions
- Providing buffer for liquidation
- Ensuring collateral can be sold without massive slippage
Early-closure decay
As a market approaches resolution, effective LTV decays to 0 over the early-closure window (default 7 days).| Time to resolution | Factor | Effective LTV (65% base) |
|---|---|---|
| > 7 days | 100% | 65% |
| 7 days | 100% | 65% |
| 3.5 days | 50% | 32.5% |
| 0 (resolution) | 0% | 0% |
If you hold positions approaching resolution, your effective borrow power will decline. Either repay debt or withdraw collateral before your HF drops below 1.0.
Cross-margin benefit
Varla is cross-margin by default — all your deposited positions contribute to one combined collateral value. This means:- 3 positions at different tiers → combined borrow power
- One position dropping doesn’t isolate you (but it does lower total collateral value)