Next, is the Liquidation ratio. This is basically at how high of a percentage can the actual collateralised debt position be triggered for liquidation. The risk-level of your CDP is determined by how close you are to the liquidity rate. For example, the Initial Collateral Rate (ICR) for Ether is 77%, while the liquidity rate is at 78%. Meaning that if you go ahead and use the full limit of collateral at 77% you'll be just 1% away from being liquidated. That's why you should borrow below the ICR.