ARTH
is redeemed, the collateral provided to the redeemer is allocated from loans with the lowest collateral ratio, even if it is above the minimum collateral ratio 110%
. 200 ETH
collateralized with a debt of 3,200 ARTH
and the current price of ETH is 20 $GMU
.125%
(= 100% * (20 * 200) / 3,200)
. Let’s imagine this is the lowest CR in the protocol and look at two examples of a partial redemption and a full redemption:1,200 ARTH
for 60 ETH
and thus repays 1,200 ARTH
of your debt, reducing it from 3,200 ARTH
to 2,000 ARTH
. 60 ETH,
worth 1,200 $GMU
, is transferred from your loan to the redeemer. Your collateral goes down from 200 ETH to 140 ETH
, while your collateral ratio goes up from 125%
to 140% (= 100% * (20 * 140) / 2,000)
.ARTH
redeemed for ETH
is more than the amount of debt a loan has. In such situations the borrower's loan is completely closed (as it's debt is paid off by the redeemer's ARTH
), the equivalent amount of ETH
is sent back to the redeemer and the borrower's collateral (ETH
) exposure is reduced by the amount redeemed.6,000 ARTH
for 300 ETH
. Given that the redeemed amount is larger than your debt minus 50 ARTH
(set aside as a Liquidation Reserve), your debt of 3,200 ARTH
is entirely cleared and your collateral gets reduced by 3,150 $GMU
of ETH, leaving you with collateral of 40 ETH (= 200 - 3,200 / 20)
.(baseRate + 0.5%) * collateral redeemed
baseRate
calculated?baseRate
state variable, which is dynamically updated. The baseRate
increases with each redemption, and decays according to the time passed since the last fee event - i.e. the last redemption or issuance of ARTH.baseRate
is decayed based on time passed since the last fee eventbaseRate
is incremented by an amount proportional to the fraction of the total ARTH supply that was redeemed(baseRate + 0.5%) * ETHdrawn
ARTH
holder will have to pay a fee which is a percentage of the value being liquidated in MAHA
tokens.ARTH
holders from redeeming their bonds but rather used to control the speed at which they do so.