To ensure that the entire $USC supply remains fully backed by collateral, shuttles with collateral ratios below the respective collateral’s Minimum Collateral Ratio (MCR) will be liquidated. Any shuttle flagged for liquidation will be fully liquidated.

The process of liquidating an undercollateralized shuttle is as follows:

  • A shuttle is flagged for liquidation when the debt position falls below the MCR

  • A liquidator identifies the flagged shuttle and initiates liquidation

  • The debt within this shuttle is fully cancelled off with the same amount of $USC from the Stability Pool (which is burned as a result)

  • Collateral is taken from the shuttle and distributed to 1) the liquidator (receives 0.5% of collateral and the 20 $USC liquidation reserve), and to 2) Stability Pool depositors (receives 99.5% of collateral)

  • The shuttle is closed and the shuttle’s owner will be left with their borrowed $USC holdings

Commonly asked questions

How does a liquidation impact me?

If you get liquidated, you will lose all of your collateral. However, you can keep the borrowed $USC

What can I do to avoid getting liquidated?

While it is impossible to completely avoid getting liquidated, it is recommended that you maintain your shuttle's collateral ratio above 180%

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