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Collateral Ratio in RupioDao(CIP) #6

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jaskara-n opened this issue Oct 23, 2024 · 0 comments
Open

Collateral Ratio in RupioDao(CIP) #6

jaskara-n opened this issue Oct 23, 2024 · 0 comments
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documentation Improvements or additions to documentation

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@jaskara-n
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Collateral Ratio in RupioDao

The collateral ratio measures the relationship between the value of locked collateral and the value of generated Rupio.
For example, if $150 worth of collateral generates 100 Rupio, the ratio is 1.5 (or 150%).

A higher ratio indicates a safer Vault, while a lower one signals higher risk. If the ratio falls below the liquidation ratio, collateral liquidation may occur to cover debts, protecting the system from undercollateralization.
@jaskara-n jaskara-n added the documentation Improvements or additions to documentation label Oct 23, 2024
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