Exchanges lower token risk values, leaving leveraged traders with less breathing room

Binance lowered the collateral ratio for six tokens on Sept. 18, while Coinbase International Exchange says 29 assets will leave its eligible-collateral list on Sept. 29. That ratio determines how much of an asset’s market value an exchange recognizes for borrowing or margin calculations.

The exchanges operate separate products and account systems, but both changes show how an affected token can keep the same market price while contributing less to a trader’s borrowing limit or margin cushion.

Binance’s Sept. 18 update cut collateral ratios for AUCTION, BLUR, GALA, HYPER, S and SYRUP from 30% to 10%. The same update raised ARB, TAO and WLD from 50% to 60%.

How exchange rules shrink usable token collateral

A hypothetical trader holding $100,000 of one of Binance’s six affected assets illustrates the change. A 30% collateral ratio gives the holding $30,000 of recognized collateral value, while a 10% ratio gives it $10,000.

The holding’s assumed market value stays at $100,000, while the amount the exchange recognizes falls by $20,000. The ratio falls by 20%, equivalent to a 66.7% relative reduction.

Binance said its Cross Margin change affects the amount a customer can borrow or transfer out. In Portfolio Margin, collateral ratios feed the unified maintenance margin ratio, or uniMMR, which measures whether the combined portfolio has enough margin to support its positions.