Collateral Ratios

Target CR and Effective CR / The difference

Target CR

TCR (Target CR) is the ratio for reaching the target aUSD price ($1):

UsageDescriptionPossible StateBehavior


TCR calculates and establishes one time per hour, with the possible step of 0.25%

  1. aUSD < $1 (TWAP)

  2. aUSD > $1 (TWAP)

  1. The protocol increases TCR

  2. The protocol lowers TCR

Effective CR

ECR (Effective CR) represents the level of aUSD collateralization:

UsageDescriptionPossible StateBehavior


After redeeming, the user obtains the needed quantity of USDC + ATM tokens for each aUSD to attain an equivalent value in dollar terms

  1. TCR < ECR

  2. TCR > ECR

  1. The protocol is overcollateralized

  2. The protocol is undercollateralized

ECR=Total Collateral ValueTotal aUSD SupplyECR = \cfrac{\text{Total Collateral Value}}{\text{Total aUSD Supply}}

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