Debt and collateral are both denominated in the same asset, so LTV barely moves with that asset's price. What moves it is the yb-token drifting against its own asset — rebalancing drag and the redemption discount. Roughly a 42% drift opens liquidation.

YieldBasis markets have a hard ceiling. When one is full every deposit reverts, including dust. Capacity also moves with the asset's price, so a market can fill without anyone depositing.

Liquidators exit seized collateral by redeeming through YieldBasis — there is no secondary market for the yb-token. If YieldBasis disables redemption, liquidation stops working and losses fall on the Senior tranche.

TBD