LTV adjustments

LTV is a policy output, not a starting assumption. For LRT collateral, the methodology begins with price, liquidity, and redemption evidence, then adjusts for AVS exposure, operator correlation, slashability timing, observation quality, and insurance capacity.

This page intentionally uses qualitative bands. There is no implemented oracle, no deployed parameter engine, and no supported-collateral list in this repository. Numeric weights would imply precision the project has not earned yet.

Adjustment ladder

Band	Evidence profile	Policy direction
Reviewable	Price, backing, redemption, operator set, exposure, timing, and insurance inputs are current and source-backed.	Eligible for normal collateral review, still with caps and stress testing.
Conservative	Core inputs exist, but one or more correlation, timing, or insurance surfaces require caution.	Lower LTV, lower borrow cap, and limited looping.
Compressed	The asset has market price evidence but opaque AVS allocation, stale timing, or unclear slash conditions.	Strong cap compression, no aggressive leverage, and admission only after risk-owner signoff.
Delayed	Required inputs are missing, stale, or dependent on upcoming governance or operator-set changes.	Admission delay; do not assign a collateral factor yet.
No admission	Slashability, correlation, timing, or coverage cannot be bounded from primary sources.	No collateral listing until the risk surface changes or becomes observable.

Review shorthand

A reviewer can use math notation to describe the direction of the policy argument without turning it into a launch parameter:

LTV_{review} \le f(P, L, R, E_{AVS}, S, I)

Here, the review LTV term is shorthand for a posture shaped by price, liquidity, redemption, AVS exposure, slashability, and insurance evidence. It is not a production oracle, contract formula, active market parameter, or supported-collateral claim.

Adjustment drivers

Driver	Conservative adjustment
Price feed is fresh but AVS exposure is opaque.	Price does not rescue the asset; compress or delay.
Operator overlap is high across admitted collateral.	Reduce portfolio-level caps even if each asset looks acceptable alone.
Shared vault or reused collateral path is material.	Treat the assets as correlated and avoid double-counting available security.
Withdrawal or epoch timing is longer than the liquidation response model.	Lower LTV and restrict looping depth.
Slash amount constraints are unclear.	Do not assume a bounded loss.
Insurance is not mapped to the exact slash surface.	Exclude it from the LTV support argument.
Governance, resolver, or curator discretion can change risk quickly.	Require a higher review tier and shorter refresh cadence.

Cap compression before LTV precision

Cap compression should usually come before fine-grained LTV precision. A small market cap with a conservative LTV can still be safer than a large market cap with an apparently precise formula over stale inputs. For early LRT collateral, caps are the cleaner expression of uncertainty because they bound total market loss while the methodology matures.

Looping limits should compress faster than base collateral limits. Recursive positions amplify price, liquidity, oracle, timing, and slashing risk at the same time. A position that is acceptable as isolated collateral may still be unacceptable as high-depth loop collateral.

Review cadence

An AVS-aware LTV is only current while its inputs are current. The review cadence should refresh:

Surface	Refresh trigger
Operator set	Operator addition, removal, ejection, or material weight change.
AVS or network allocation	New service opt-in, allocation increase, deallocation, or changed task scope.
Slash conditions	New release, governance change, resolver change, safety-delay change, or new fault class.
Vault or withdrawal timing	Epoch-duration change, withdrawal-delay change, or claim-path incident.
Insurance capacity	Pool size change, payout, exclusion update, or change in covered risk surface.
Market data	Price-feed outage, liquidity loss, exchange delisting, redemption stress, or stale report.

Until those refresh rules are implemented, Lyrasing should describe LTV adjustments as methodology framing only. The output of this page is a review language for later protocol work, not a parameter claim.

Source notes

EigenLayer and Symbiotic both make slashing, allocation, operator participation, and timing explicit protocol surfaces. Lyrasing’s LTV framing follows from that structure: a collateral factor should compress when the AVS-risk evidence is weak, stale, correlated, or not covered by a mapped insurance pool.