Individual Vault Collateral Ratio (ICR)

Your Individual Vault Collateral Ratio (ICR) shows the degree of collateralization associated with your debt. It is calculated:

ICR = (collateral value / debt) * 100%

Example:

A user deposits 1,000 xFIL and mints 2,000 cUSD. Assuming the price of xFIL = $5, the ICR will be 250%.

(1000 xFIL * $5) / 2000 cUSD * 100% = 250%

If the price of xFIL subsequently drops to xFIL = $4, the ICR will adjust downward, to 200%.

Liquidations

Should your ICR fall below the MCR, your vault will be in danger of being targeted for liquidation.

Redemptions

If any user activates a redemption on a token that is your supported collateral, and your ICR is the lowest amongst all the participants of the aforementioned token, your vault will be redeemed even if your ICR is above the MCR.

When this happens, your vault will close, you will lose your previously deposited collateral, and your debt will be written off. This may happen partially or in full - your debt will be reduced in proportion to the amount of collateral redeemed.

Do note that if you choose to pay the non-redemption fee, your vault will be safe from third party redemptions, and none of the above will apply to you.