Collateral Ratio
TCR and ECR

Target Collateral Ratio

Target Collateral Ratio (the "TCR") represents the ratio needed to reach the desired asset price.
  • The TCR is used in the oUSD minting calculation formula in the form of a percentage.
  • The TCR will be automatically calculated and established one time per hour, with the possible step of 0.25%.
Condition
Result
< $1 (TWAP)
The protocol increases TCR
> $1 (TWAP)
The protocol lowers TCR

Effective Collateral Ratio

Effective Collateral Ratio (the "ECR") represents the amount of USDC token stored as collateral for the oUSD.
  • The ECR is used in the oUSD redeeming calculation formula in the form of a percentage.
  • After redeeming, for every oUSD the user receives the required amount of USDC and ORU tokens to achieve an equivalent value in dollar terms.
Condition
Result
TCR < ECR
The protocol is overcollateralized
TCR > ECR
The protocol is undercollateralized
ECR=Total Collateral ValueTotal oUSD SupplyECR = \cfrac{\text{Total Collateral Value}}{\text{Total oUSD Supply}}
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Target Collateral Ratio
Effective Collateral Ratio