> For the complete documentation index, see [llms.txt](https://psy-stablecoin.gitbook.io/psy/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://psy-stablecoin.gitbook.io/psy/stablecoin/recovery-mode.md).

# 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.