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Morpho does not have a traditional LTV, only an LLTV (Liquidation Loan-to-Value). The Safety Margin is a Dynamo feature that creates a synthetic LTV so you can manage your borrow position more conservatively.

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How It Works

When you set a Safety Margin while borrowing from a market, Dynamo automatically reduces the amount you borrow relative to your collateral, keeping your actual borrowed amount below Morpho’s LLTV threshold. This gives you a configurable buffer between your current position and the liquidation point, effectively letting you operate as if there were a lower LTV limit, even though Morpho’s underlying contracts only enforce LLTV.

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Why Use a Safety Margin?

  • Reduce liquidation risk — A lower effective LTV means your position can survive larger collateral price drops before being at risk.
  • Automate discipline — Instead of manually tracking your position, you set a target LTV once, and Dynamo enforces it.
  • Stay in control — You choose how conservative to be. A tighter margin means more protection; a looser margin allows higher capital efficiency.

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Setting Your Safety Margin

You can configure the Safety Margin when opening or managing a borrow position. Dynamo will calculate the maximum borrow amount that keeps you within your chosen LTV, and reduce the borrowed amount accordingly.