Risk
Know the boundary before you borrow.
Turnstone is a credit protocol. The yield is real, and so is the liquidation risk. Everything the engine uses to size and unwind a position is documented here.
Liquidation simulator
Move the reference price and watch what happens to the position.
Stock
NVDA at $135.00
Liquidation at $97.30 (−45.9% from today)
Suggested action
Reduce debt or add collateral. At this level a normal single-session move can push the position toward liquidation.
Risk parameters by market
Every market is isolated. These are the live parameters the credit controller applies when sizing borrowing power and deciding whether a position can be unwound.
| Market | Collateral factor | Liquidation threshold | Buffer | Supply cap | Borrow cap | Reserve factor | Oracle | Tier |
|---|---|---|---|---|---|---|---|---|
| NVDA | 65% | 74% | +9% | $40M | $20M | 10% | 22s | Core |
| AAPL | 70% | 78% | +8% | $55M | $28M | 10% | 18s | Core |
| TSLA | 55% | 65% | +10% | $24M | $15M | 10% | 26s | Elevated |
| HOOD | 55% | 64% | +9% | $15M | $8M | 10% | 14s | Elevated |
| MSFT | 70% | 79% | +9% | $50M | $25M | 10% | 20s | Core |
| AMZN | 65% | 74% | +9% | $34M | $17M | 10% | 31s | Core |
| META | 65% | 74% | +9% | $30M | $16M | 10% | 24s | Core |
| GOOGL | 70% | 78% | +8% | $42M | $22M | 10% | 17s | Core |
Buffer is the gap between the collateral factor and the liquidation threshold — the room a position opened at maximum borrow has before it reaches the boundary.
Risk controls
Market isolation
Every stock has its own vault, oracle feed, caps and parameters. A liquidity failure or price shock in one of the 8 markets does not automatically contaminate the others.
Collateral factors
Borrowing power is capped as a fraction of collateral value. Elevated-risk markets carry lower factors than core markets, so more of the position stays unencumbered.
Liquidation thresholds
Liquidation begins above a higher ratio than the collateral factor. That gap is deliberate: a position opened at maximum borrow does not start at the boundary.
Oracle freshness
Prices carry a 15m heartbeat. A feed that has not updated inside that window is treated as stale, and a deviation beyond 2% between sources halts dependent actions.
Supply and borrow caps
Each market carries a supply cap and a stock borrow cap. Caps bound the protocol's exposure to any single issuer and keep withdrawal liquidity meaningful.
Utilization curves
A kinked rate model raises the borrow rate steeply past the optimal utilization, which pulls stock liquidity back into a market before withdrawals become impossible.
Safety reserves
10% of stock borrow interest and 15% of USDG borrow interest are retained as reserves that absorb bad debt before it reaches suppliers.
Pause controls
Individual markets can be paused for new supply, new borrows, or both — without freezing repayment or withdrawal on healthy positions elsewhere.
Bad-debt accounting
Shortfalls that survive liquidation are recognised against reserves rather than socialised silently across suppliers.
Governance delay
Risk-parameter changes pass through a 48-hour timelock, so no collateral factor or threshold can move without warning.
No recursive leverage
A receipt token cannot be redeposited into its own vault, and the same receipt cannot be looped as collateral against itself. Leverage is bounded by design.
Market-hours and price gaps
Tokenized equities reference an underlying that trades on its own schedule. Prices can gap across closures, and a gap can move a position from healthy to liquidatable without an intervening quote.
Where the yield actually comes from
Stock suppliers are paid by stock borrowers. Market makers, hedgers, arbitrageurs and desks seeking short-side inventory post approved collateral and pay a variable rate for access to tokenized stock. That interest — less the reserve and protocol share — is returned to the vault, which raises the receipt-token exchange rate.
There is no emission, no subsidy and no guaranteed rate. When borrow demand for a stock falls, so does its supply APY.
What variable rates mean for you
Both sides of a Turnstone position float. The stock supply APY moves with borrow demand; the USDG borrow APR moves with credit-market utilization. Net carry is the spread between them — and it can turn negative.
Net carry is also a comparison of two different denominations. Yield accrues in stock; debt is owed in USDG. A positive spread does not guarantee that yield will cover interest in dollar terms, because the stock price can move either way.
Yield-directed repayment
Choosing Offset debt routes stock accrued above your originally deposited principal toward reducing USDG debt. Only that surplus is ever eligible.
This is not a self-repaying loan. It does not protect your principal, it does not guarantee the debt will be cleared, and it does not remove the possibility of liquidation.
Eligibility and jurisdiction
Tokenized equity products carry eligibility restrictions that vary by jurisdiction and by issuer. Access to Turnstone markets may be limited accordingly, and eligibility can change.
Nothing on this site is investment advice. Read the documentation for the full architecture.