Recovery Mode

About Recovery Mode

Recovery Mode kicks in when the Total Collateral Ratio (TCR) of the system falls below 150%.

During Recovery Mode, Troves with a collateral ratio below 150% can be liquidated.

Moreover, the system blocks borrower transactions that would further decrease the TCR. New SLSD may only be issued by adjusting existing Troves in a way that improves their collateral ratio, or by opening a new Trove with a collateral ratio>=150%. In general, if an existing Trove's adjustment reduces its collateral ratio, the transaction is only executed if the resulting TCR is above 150%.

While Recovery Mode has no impact on the redemption fee, the borrowing fee is set to 0% to maximally encourage borrowing (within the limits described above).

In Recovery Mode, liquidation loss is capped at 110% of a Trove's collateral. Any remainder, i.e. the collateral above 110% (and below the TCR), can be reclaimed by the liquidated borrower using the standard web interface.