# Reserve

A **reserve** is an instance of a token within an <code class="expression">space.vars.FORK\_NAME</code> liquidity pool. Each reserve is configured with parameters that manage risk and optimise liquidity. These parameters can vary across different markets, even for the same underlying token, allowing <code class="expression">space.vars.FORK\_NAME</code> to adapt to various network and pool conditions.

### Key Reserve Parameters

1. **Loan-to-Value (LTV)**: The maximum amount that can be borrowed relative to the collateral’s value. For example, a 75% LTV allows borrowing 75% of the collateral’s value. An asset with an LTV of 0% cannot be enabled as collateral.
2. **Liquidation Threshold**: Defines the point at which a position becomes at risk of liquidation. If the threshold is exceeded, the position could be liquidated to repay the borrower's debt.
3. **Borrowing Enabled**: Determines whether liquidity of a reserve can be borrowed.
4. **Caps**: Supply and Borrow caps limit the total amount of a token that can be supplied and borrowed from a reserve. These caps are crucial for maintaining liquidity and preventing overexposure during volatile market conditions​.
5. **Interest Rate Model**: Interest rates in <code class="expression">space.vars.FORK\_NAME</code> adjust dynamically based on the utilisation of the liquidity pool. As more liquidity is borrowed, interest rates rise to reflect the reduced availability of assets, creating conditions that enough liquidity remains for withdrawals and liquidations. The rates are controlled by parameters that set the base rate and slopes for utilisation​.

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