Fully Diluted Value Vs. Liquidity
The assessment framework balances fully diluted value (FDV) considerations with liquidity depth to optimize collateral selection and minimize liquidation risks. High FDV often indicates project maturity, ongoing community engagement, and sustained liquidity potential, while deep liquidity enables efficient liquidation with minimal price impact. This balanced approach minimizes slippage risks, reduces insolvency potential, and avoids assets prone to supply shocks or market manipulation. The integration ensures that substantial portions of token value remain tradeable without causing major price disruptions during liquidation events.