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}}ECR=Total oUSD SupplyTotal Collateral Value​

Condition	Result
< $1 (TWAP)	The protocol increases TCR
> $1 (TWAP)	The protocol lowers TCR

Condition	Result
TCR < ECR	The protocol is overcollateralized
TCR > ECR	The protocol is undercollateralized

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Last modified 1yr ago