Changes To Our Margin Call And Liquidation Policy

We're making important changes to how margin calls work at Lantern. Here's what's changing and why it matters for your loan.

What's Changing (December 2025 Update)

1. 72-Hour Grace Period

Previous policy: 3 business days after a margin call

New policy: 72 hours after the margin call triggers

Important note: If you took out your loan before December 2025, we'll honor the original 3-business-day policy for your existing loan.

2. Continuous Margin Call Alerts (No More Confusion)

The old problem:

You'd receive a margin call alert when your LTV hits 65%. But if your LTV dropped to 63% the next day, you wouldn't get another alert. This created confusion:

• Is my grace period still counting down?

• How much time do I have left?

• Am I still in margin call territory?

The new system:

• Initial trigger: Margin call activates when LTV reaches 65%

• Ongoing alerts: You'll receive daily email alerts as long as your LTV stays above 60%

• Grace period countdown: The 72-hour clock continues as long as LTV remains above 60%

• Auto-reset: If your LTV stays below 60% for 24 hours, your margin call clears and your grace period resets completely

Example scenario:

• Day 1, 2:00 PM: Your LTV hits 65.5% → Margin call triggers, 72-hour countdown begins

• Day 2, 10:00 AM: Your LTV is 63% → You still receive an alert, countdown continues

• Day 2, 4:00 PM: Your LTV drops to 58% → Alerts pause, but the countdown is still active

• Day 3, 4:00 PM: Your LTV has been below 60% for 24 hours → Margin call cleared, grace period resets

• Day 4: Your LTV climbs back to 66% → New margin call triggers with fresh 72-hour window

3. No Changes to Liquidation Threshold

Liquidation still occurs at 75% LTV after the 72-hour grace period expires.

This hasn't changed. What has changed is the clarity around how you get there and the amount of warning you receive along the way.

Why We're Making These Changes

Clear Timelines

The previous "3 business days" system created ambiguity. Borrowers couldn't easily calculate exactly when their grace period would expire (especially during the holiday season)

With a 72-hour countdown, you know exactly where you stand at all times.

Reduced Alert Fatigue Without Sacrificing Safety

The old system had two problems:

1. Too many alerts:

   If your LTV hovered around 65%, you'd get daily warnings even when you weren't in immediate danger

2. Not enough information:

   If your LTV dropped slightly, alerts stopped, but the grace period kept counting down

The new 60-65% alert zone solves both issues. You get consistent warnings when you're in margin call territory, but not when you've created a sufficient buffer.

What This Means for Your Strategy

The 60-65% Zone is Your Safety Buffer

Think of 60-65% LTV as your "watch" zone:

• Below 60%: Green light, plenty of cushion

• 60-65%: Yellow light, stay alert, but you have time

• Above 65%: Red light, 72-hour countdown active

If you keep your LTV below 60%, you'll not worry about margin calls.

Communication is Critical

We can work with borrowers who communicate with us during their grace period. We've helped many borrowers avoid liquidation by:

• Structuring partial repayments

• Arranging collateral additions

• Finding solutions to preserve positions

However, we can only help if you reach out to us and communicate with us.

After the 72-hour grace period expires with no communication, our flexibility becomes extremely limited. The loan enters automated liquidation protocols.

Monitor Your Position Proactively

Don't wait for margin call alerts. Check your dashboard regularly, especially during volatile market periods.

New Feature: We've added a countdown timer to your dashboard. Once a margin call triggers, you'll see exactly how much time remains in your grace period. This timer will appear both on your main dashboard and within each loan's management page.

Dashboard

Loan Management Page

How Lantern's Approach Still Differs from Competitors

Even with these updates, our margin call policy remains significantly more borrower-friendly than the industry standard:

Industry Standard:

• Auto-liquidation at threshold

• No grace period

• No human oversight

• Liquidation fees (1-5%)

Lantern:

• 72-hour grace period

• Continuous clear alerts

• Team available to help

• Zero liquidation fees

We built these protections into our platform specifically because we remember what happened during the flash crash of October 10, 2025.

While other platforms liquidated billions in positions, every single Lantern borrower kept their crypto because they had time to respond.

Action Items for Current Borrowers

1. Review Your Current LTV

Log in to your dashboard and check where your positions stand today. Are you comfortable with your current buffer?

2. Set Your Own Internal Alerts

Consider 60% LTV as your personal warning threshold. If you approach it, do consider taking action before margin calls trigger.

3. Save Our Contact Information

Call/Text: (415) 365-0100 Email: [email protected]

If you receive a margin call alert and foresee an issue with lowering your LTV, reach out as soon as possible.

4. Understand Your Numbers

For each loan, know:

• Your current LTV ratio

• How much the collateral price would need to drop to hit 65% (margin call)

• How much would it need to drop to hit 75% (liquidation)

These numbers are available in your dashboard for every active loan.

Looking Ahead

This policy update is part of our ongoing commitment to transparency and borrower protection.

We continue to believe that crypto lending works best when platforms are aligned with borrower success, not borrower liquidation.

Questions?

This is an important update. If anything is unclear, please reach out:

• Text us: (415) 365-0100

• Email: [email protected]

• Dashboard: lantern.finance/dashboard

Our team is here to ensure you understand exactly how these changes affect your specific situation.

The Lantern Team

This is for informational purposes only and does not constitute financial advice. All borrowers should review their loan agreements and understand their specific margin call and liquidation thresholds.