Liquidations in Recovery Mode

Liquidations in Recovery Mode (TCR < 150%)

Scenario	Liquidation Action
ICR =< 100%	All collateral and debt (minus the $USC20 liquidation reserve) is redistributed to active shuttles.
MCR > ICR > 100%; SP >= shuttle debt	All debt from the shuttles that were flagged for liquidation is offset by $USC in the Stability Pool. The liquidated shuttles’ collateral is shared between Stability Pool depositors and the liquidator.
MCR > ICR > 100%; SP < shuttle debt	All the Stability Pool’s $USC is offset with an equal amount of debt from the shuttles that were flagged for liquidation. A fraction of the collateral (equal to the ratio of its offset debt to its entire debt) is shared between Stability Pool depositors and the liquidator. All remaining collateral and debt that was not liquidated (minus the $USC20 liquidation reserve) is redistributed to active shuttles
TCR >= ICR > MCR; SP >= shuttle debt	$USC in the Stability Pool is offset with an equal amount of debt from the shuttles that were flagged for liquidation. A fraction of collateral with dollar value equal to MCR * debt is shared between depositors. Nothing is redistributed to other active shuttles. Since its ICR was > MCR, the shuttle has a collateral remaining, which is sent to the Surplus Pool and is claimable by the liquidated borrower. The shuttle is closed.
TCR >= ICR > MCR; SP < shuttle debt	Nothing done
TCR =< ICR	Nothing done

Where:

ICR = Individual Collateral Ratio for CDCETH shuttles

MCR = Minimum Collateral Ratio for CDCETH shuttles

TCR = Total Collateral Ratio for CDCETH shuttles

SP = Stability Pool