Margin Call (Lending)
A notification to borrowers to add collateral or repay part of a loan to restore a safe LTV ratio.
What is Margin Call (Lending)?
In DeFi lending, a margin call alerts borrowers when collateral value nears the liquidation threshold, prompting them to deposit more assets or reduce debt. Unlike traditional finance, DeFi margin calls are automated via smart contracts or dashboards. For example, Aave notifies users if their health factor drops below 1.5, giving them time to act before liquidation.
In 2024, margin call systems prevented 20% of potential liquidations on MakerDAO by enabling proactive user actions, per Dune Analytics. As of 2025, protocols integrate cross-platform alerts, improving user experience and reducing losses during volatility.
Related Terms
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Executable code deployed on the Solana blockchain that processes transaction instructions to read from and modify controlled accounts, equivalent to smart contracts on other blockchains.
Beacon Chain
The proof-of-stake consensus layer of Ethereum, coordinating validators since December 2020.
Data Asset Monetization
Generating revenue from data using digital asset transactions.
US GAAP Stablecoin Classification
Accounting standards under U.S. Generally Accepted Accounting Principles treating certain USD-pegged stablecoins as cash equivalents.
AML/CFT
Anti-Money Laundering and Countering the Financing of Terrorism regulations for financial integrity.
Celestia DA
A modular data availability network that offloads DA from Ethereum's execution layers, enabling scalable rollups with low costs.