# Recollateralize

Economically useful user action
The recollateralize function verifies if the ECR is below the current TCR. If true, the protocol allows the caller to deposit the collateral amount needed to reach the TCR and receive back newly minted ORU tokens with the bonus rate of 0.5% in order to quickly incentivize arbitragers, close the gap and recollateralize the protocol to the target ratio. The bonus rate can be adjusted or changed through the protocol governance. $ORU_{received} = \dfrac{(USDC_{Amount}×USDC_{price})(1+B_{rate})}{ORU_{price}}$

### Example conditions

• 100,000,000 oUSD in circulation at a 80% ECR
• The total protocol's collateral value is $80m and the system is balanced: TCR＝ECR • The price of oUSD drops to$0.99 and the protocol increases TCR to 80.25%
There is now $250,000 worth of collateral needed to reach TCR. The user can now call the recollateralize function and place up to$250,000 of collateral into the protocol to receive an equal value of ORU and additional ORU with a bonus rate of 0.50%.
Placing 250,000 USDC at a price of $1 per USDC and a market price of$2.50 per ORU:
$ORU_{received} = \dfrac{(250000×1)(1+0.005)}{2.50}=100500$