The LTV protocol operates as an implementation of the ERC-4626 vault standard, managing a collective leveraged position within a lending protocol. It continuously rebalances to maintain a target loan-to-value (LTV) ratio in a permissionless manner using incentive-driven auctions. Each time a user deposits or withdraws assets, the vault recalculates the optimal collateral-to-borrow ratio using the equation:

and adjusts it through auctions. As a result, after every interaction, the system automatically aligns the vault with the target leverage. The complete model is detailed in our paper.