# Collateral Risk Parameters

The minimum collateral ratio (MCR) works to ensure that $USC remains overcollateralized at all times. Every shuttle must have a debt position above MCR in order to remain active. 

To recap, collateral ratio is calculated as follows:

*Collateral ratio = (amount of collateral in USD / amount of $USC borrowed in USD) \* 100*

The MCR is dependent on our risk assessment of the underlying collateral type. <br>

<table><thead><tr><th>Collateral Type</th><th width="273">Parameter</th><th></th></tr></thead><tbody><tr><td>CDCETH &#x26; CDCBTC</td><td>Minimum Collateral Ratio (MCR)</td><td>135%*</td></tr><tr><td>CDCETH &#x26; CDCBTC</td><td>Total Collateral Ratio (TCR)</td><td>150%</td></tr><tr><td>CDCETH &#x26; CDCBTC</td><td>Collateral Cap</td><td>N.A.</td></tr></tbody></table>

*\*The minimum collateral ratio displayed on Orby's website will be 140%. We provided a 5% buffer to ensure that users do not get immediately liquidated*

| LCRO (& CRO) | Minimum Collateral Ratio (MCR) | 135%\* |
| ------------ | ------------------------------ | ------ |
| LCRO (& CRO) | Total Collateral Ratio (TCR)   | 150%   |
| LCRO (& CRO) | Collateral Cap                 | N.A.   |

*\*The minimum collateral ratio displayed on Orby's website will be 135%. We provided a 5% buffer to ensure that users do not get immediately liquidated*

## Commonly asked questions

<details>

<summary>What is Total Collateral Ratio (TCR)?</summary>

**Total Collateral Ratio (TCR)** is the average of all shuttle's collateral ratio.&#x20;

* TCR = total dollar value of the respective collateral / total dollar value of the corresponding debt&#x20;

If TCR falls below the specified threshold (in this case it's 150%), then all shuttles with $cdcETH will go into Recovery Mode. You can read more about Recovery Mode and its impact on you [here](/overview/recovery-mode.md).&#x20;

</details>


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