Liquidations

To keep the entire $USC supply fully backed, any shuttle that falls below the Minimum Collateral Ratio (MCR) will be fully liquidated.

How Liquidation Works:

1. A shuttle is flagged for liquidation when its collateral ratio drops below the MCR.

2. A liquidator detects the flagged shuttle and starts the liquidation process.

3. The shuttle’s debt is erased using $USC from the Stability Pool (this $USC is then burned).

4. The shuttle’s collateral is distributed as follows:

   • 0.5% + the 20 $USC liquidation reserve go to the liquidator.

   • 99.5% goes to Stability Pool depositors.

5. The shuttle is closed, and the owner keeps their remaining borrowed $USC.

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%