When a scenario walkthrough changes the borrow size
A look at how mild and sharp price paths against a liquidation buffer can lead clients to borrow less — without abandoning the loan.
Not every desk session ends with “add more collateral.” Sometimes the honest reading of the liquidation buffer is that the principal should shrink.
What a walkthrough adds
A liquidation scenario walkthrough starts from a baseline buffer, then applies price paths you agree on at the opening of the hour. Mild paths often leave the loan intact. Sharp paths show which collateral line fails first when haircuts differ.
Seeing a forced-close price on the second monitor changes the conversation. Clients who were debating a top-up sometimes choose a smaller borrow instead — keeping the same coins and accepting a lower principal.
What we refuse to do
We do not invent lender schedules. If maintenance rules are missing, the scenario sheet marks gaps in plain language. A precise-looking liquidation price built on silence is worse than an incomplete estimate.
Fit with other sessions
Many clients book the flagship buffer review first, then a scenario hour for internal stakeholders who only care about “how far can price fall.” That sequence keeps the baseline honest before stress paths begin.