What Is DeFi Debt Ratio?

In this article, you'll learn about what DeFi debt ratio stand for and how it is calculated.

Lena avatar
Written by Lena
Updated over a week ago

The debt ratio is the proportion of assets that are financed by debt.

A debt ratio of greater than 1.0 or 100% means that you have more debt than assets, while a debt ratio of less than 1.0 or 100% indicates that you have more assets than debt.

A high ratio may carry a risk of default on its loans if interest rates suddenly rise. A ratio below 1 means that a greater portion of assets is funded by equity.

The formula for calculating the debt ratio is:

​Debt ratio = Total assets / Total debt​.

CoinStats has a DeFi tab, where you can check the debt-to-total assets and the debt ratio. Please follow this link for more information.

Feel free to reach out at support@coinstats.app or the live chat from inside the app if you have any further questions. 🧡

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