Redemption

Any holder of cUSD can exchange cUSD = $1 for any type of supported collateral at face value, at any time. This process is known as redemption and the redeemer will be charged a redemption fee.

When a vault is redeemed against, it will not suffer a net loss.

Redemption targets the riskiest vaults, as determined by collateral ratios.

If your ICR is the lowest for a type of collateral that is being redeemed, your vault will be targeted. This will result in either your vault being closed entirely, or a reduction in its amount of collateral.

Users seeking to avoid redemption on their vaults should strive to maintain a high collateral ratio relative to the rest of the vaults within the protocol. Alternatively, users can choose to disable the vault redemption feature by paying a non-redemption fee.