Having a healthy margin in a crypto credit is essential because it determines how secure your position is and how likely your collateral is to be liquidated.
Protect Your Collateral
If the value of your collateral (for example, Bitcoin) drops, your coverage decreases.
A higher margin gives you a “safety cushion,” so price swings don’t put your credit at risk.
Reduce Liquidation Risk
When your margin gets too low, the platform may trigger an automatic liquidation — meaning your collateral is sold to repay the loan.
A healthy margin keeps you safely away from that point.
Greater Financial Stability
Maintaining a strong margin means you don’t have to constantly monitor market volatility.
It gives you more peace of mind and flexibility in managing your credit.
More Favorable Conditions
Some platforms adjust interest rates based on your margin — the higher your margin, the lower the perceived risk, and sometimes, the better the terms.
In short: a healthy margin acts like a safety buffer.
The higher your margin, the more protected you are from sudden market swings and the lower your risk of losing your collateral.