Chymia
  • What is Chymia
  • ELI5: Activities on Chymia
  • Protocol Concepts
    • Connecting Web3 Wallets to Chymia
    • Depositing Collateral and Minting cUSD
      • Vault
      • Individual Vault Collateral Ratio (ICR)
      • Minimum Collateral Ratio (MCR)
      • Loan Duration
      • Liquidation Reserve
    • Using cUSD
      • Stability Pool
        • Acquiring Liquidated Collateral at a Discount
      • Redemption
    • Repaying cUSD Debt
    • Peg Maintenance
    • Liquidations
      • Liquidator
      • Claiming Liquidated Collateral
      • Liquidation Penalty
      • Underfunded Stability Pool
    • Recovery Mode
      • Impact on Fees
      • Impact on Liquidations
    • Fees
      • Minting Fees
      • Redemption Fees
      • Non-Redemption Fees
      • Interest Fees on Debt
    • Supported Collateral
  • Governance
    • Protocol Governance
    • Earning CHY
    • Emissions
    • Locking
    • Voting
    • Boosting Emissions
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  1. Protocol Concepts

Recovery Mode

During times of heightened stress, the protocol will go into Recovery Mode to ensure that it stays functional and solvent.

This occurs when the Total Collateral Ratio (TCR) falls below 150%. The TCR is calculated:

TCR = Total Collateral / Total Debt

As such, Recovery Mode encourages behavior that pushes the TCR back above 150%, by increasing collateral deposits and/or reducing debt balances.

During Recovery Mode:

  • Any vault that has a ICR < TCR is subjected to liquidation.

  • Any additional borrowing that reduces the TCR will be restricted.

  • New cUSD can be minted during recovery mode by improving the collateral ratio of existing vaults, or by creating new vaults with ICR of 150% or higher.

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Last updated 1 year ago