“A 10:1 levered firm is wiped out if assets lose 1/11th (~9.09%) of their value.”
Add one to the leverage ratio and flip it. That’s how far assets can fall before the equity is gone. It’s one line of arithmetic, and the crypto exchanges that just blew up either never did it or hoped nobody else would. Leverage isn’t complicated. It just gets dressed up as complicated so nobody asks how thin the cushion is.