🌿
Vine Money
  • Introducing Vine Money
  • Introduction
    • Underlying Tech
    • Market Opportunity
    • Growth Strategy
  • Protocol
    • Deposit Collateral and Mint vUSD
    • Dynamic Liquidity Provisioning
    • Stability Pool and Liquidations
    • Redemptions and Peg Stability
    • Protocol Fees
    • Recovery Mode
    • Supported Collaterals
    • Privacy Mechanics
  • Governance
    • The VINE Token
    • Staking Weight
    • Rewards Boost
    • Rewards Voting
    • Revenue Share
    • DAO Governance
  • Guides
    • Deposit
    • Provide dLP
    • Earn
    • Rewards
    • Boost
    • Redeem
    • Vote
  • Resources
    • Contracts
    • Audits
    • Brand Assets
    • FAQ
  • DISCLAIMER
    • Disclaimer
    • Privacy Policy
    • Service Agreement
Powered by GitBook
On this page
  • Recovery Mode Triggers and Functionality
  • Liquidation Process in Recovery Mode
  • Strategies for Users in Recovery Mode
  1. Protocol

Recovery Mode

PreviousProtocol FeesNextSupported Collaterals

Last updated 1 year ago

Vine Money incorporates a Recovery Mode to ensure the system's stability during periods of high volatility or when the overall health of the platform is at risk. It is a crucial mechanism that acts as a safeguard during times of heightened financial stress or systemic risk. By adjusting operational parameters based on the overall health of the platform, Vine ensures its resilience and long-term stability. This section explains the Recovery Mode's functionality, its triggering conditions, and its impact on the ecosystem.

Recovery Mode Triggers and Functionality

  • Global Total Collateral Ratio (GTCR): Recovery Mode is activated when the GTCR falls below a threshold of 180%. The GTCR is a measure of the overall health of the system.

GTCR=∑Collateral Value in USD∑Debt in vUSD×100%\text{GTCR} = \frac{\sum \text{Collateral Value in USD}}{\sum \text{Debt in vUSD}} \times 100\% GTCR=∑Debt in vUSD∑Collateral Value in USD​×100%

  • Restrictions on Vaults: When Recovery Mode is active, certain operations are restricted to prevent actions that might further decrease the GTCR.

  • Impact on Borrowing: New vUSD can only be minted if it improves the collateral ratio of an existing vault or if a new vault is opened with a collateral ratio greater than or equal to 180%.

  • Exiting Recovery Mode: An improvement in GTCR leads to the deactivation of Recovery Mode once the GTCR rises above the set threshold of 180%.

Liquidation Process in Recovery Mode

  • Modified Liquidation Criteria: In Recovery Mode, vaults with a collateral ratio below the GTCR are subject to liquidation even if the collateral ratio is above 150%.

  • Liquidation Mechanics: The specifics of liquidation in Recovery Mode vary based on the individual collateral ratio (ICR) of the vaults and the status of the Stability Pool.

If ICR<GTCR and SP vUSD≥Vault Debt, then Liquidate\text{If ICR} < \text{GTCR and SP vUSD} \geq \text{Vault Debt, then Liquidate} If ICR<GTCR and SP vUSD≥Vault Debt, then Liquidate

  • Impact on Liquidations: In Recovery Mode, vaults with collateral ratios below GTCR are liquidation-prone. A ratio over 180% avoids liquidation, with losses capped at 120% of collateral.

Strategies for Users in Recovery Mode

  • Maintaining High Collateral Ratios: Users are encouraged to maintain collateral ratios above the GTCR to avoid liquidation.

  • Active Monitoring: Users should actively monitor the status of their vaults, especially in volatile market conditions to ensure they are not prone to liquidation.