Every market on Pillar is defined by five numbers, and all five are on-chain parameters you can read from the contract. This post is about how the numbers were chosen for the nine markets that launched, because a lending protocol is its parameters, and a protocol that will not explain them is asking for more trust than it has earned.
The first number is the maximum loan to value. It is fifty percent for the single stocks, sixty for the two index funds, forty for TSLA. Deposit a hundred dollars of AAPL and you can borrow fifty dollars of USDG, not a cent more. That is conservative by the standards of crypto lending and deliberately so. Stock Tokens track equities, equities gap on earnings and on news, and the feeds that price them go quiet over the weekend. A loan sized for a calm Tuesday afternoon is a loan that gets liquidated on a Monday morning.
The second is the liquidation threshold: sixty percent for single stocks, seventy for the index funds, fifty for TSLA. Your position is healthy while debt divided by collateral value stays below it. The gap between the maximum LTV and the threshold is your cushion. At fifty and sixty, AAPL has to fall about seventeen percent from the moment you borrowed the maximum before liquidation is possible. On SPY the same cushion is a fourteen percent fall, which sounds smaller until you remember how rarely SPY falls fourteen percent.
The third is the liquidation bonus. A liquidator who repays part of an unhealthy loan receives collateral worth the repayment plus five percent, seven and a half on TSLA. That is their incentive to do it, and it is also a cost to you, which is why the threshold sits where it does. The bonus is paid only on the slice that gets liquidated, not the whole position, and liquidation is partial by construction: the smallest repayment that restores health.
The fourth is the cap, the total collateral a market will accept. At launch every cap is zero, which in this contract means uncapped. That will change as the markets see use. The fifth is the price ceiling, a sanity bound on the oracle answer above which the market refuses to lend, and at launch it is disabled, because the feeds are new and we would rather watch them than guess.
TSLA gets the tightest numbers of the nine and it is worth saying why. It is the most volatile name in the set by a wide margin, and a loan to value that is safe for Apple is not safe for a stock that moves eight percent on a tweet. Treating every market the same would have meant either lending too little against SPY or too much against TSLA. Different numbers are the honest answer.