# Asset-level Each asset on Solera is assigned specific risk parameters that govern its use for lending and borrowing. These parameters are designed to address security, governance, and market dynamics, ensuring that risks are managed at an individual asset level. **V1** introduces advanced risk measures to onboard a broader range of assets, including those with higher risk profiles. Understanding the inherent risks of each asset, including **smart contract security**, **centralization risks**, and **market volatility**, is crucial to maintaining a stable protocol. Each asset in Solera is onboarded through **governance proposals** or by admins appointed by governance, ensuring a thorough risk assessment. **Key Risk Parameters:** * **Supply Caps**: Limit the total supply of an asset within the protocol, based on its on-chain liquidity and collateral volume. * **Borrow Caps**: Set a maximum borrowing limit for each asset, reducing the risk of price manipulation and insolvency. * **Efficiency Mode (eMode)**: Provides higher **Loan-to-Value (LTV)** ratios for correlated assets like stablecoins and **Liquid Staking Derivatives (LSDs)**, optimizing capital efficiency while managing risk. To further mitigate market risks, loans on Solera require **over-collateralization**, and assets are subject to specific **collateralization and liquidation rules**. If the value of collateral falls below a defined **liquidation threshold**, a portion is liquidated to repay debt and maintain solvency. Solera’s risk management framework ensures that each asset is appropriately managed, balancing capital efficiency with the security of the protocol. --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://docs.solera.market/protocol/risk-management/risk-parameters/asset-level.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.