Definition

Recovery Rate

Meaning ⎊ The portion of a defaulted asset's value that can be recovered by the lender or investor.
Greeks.liveMarch 21, 2026

Recovery Rate

The recovery rate is the percentage of the principal value of a debt or asset that is expected to be reclaimed after a default occurs. In the event of a protocol collapse or borrower insolvency, the recovery rate determines how much of the original investment can be salvaged.

For secured loans, this is heavily influenced by the quality and liquidity of the collateral. In unsecured crypto lending, the recovery rate is often near zero due to the difficulty of recovering digital assets across borders.

Accurate estimation of the recovery rate is essential for calculating the expected loss in any default scenario. It serves as a key input in risk-adjusted return models.

Recovery Strategy
Fixed-Floating Swap
Interest Rate Transmission
Private Key Redundancy
Key Recovery Services
Asset Recovery Limitations
Recovery and Resolution Planning
Key Recovery Protocols

Glossary

Recovery Rate

Recovery ⎊ In the context of cryptocurrency derivatives, options trading, and financial derivatives generally, recovery rate quantifies the proportion of an asset's value regained following a significant decline, often triggered by market volatility or adverse events.