📊 Introducing Collateral Ratios
A Collateral Ratio (CR) denotes the relationship between the value of a given collateral and its associated debt (CR = Collateral Value / Debt Value). Below is a breakdown of the various ratios incorporated within the eBTC protocol:
Total Collateral Ratio (TCR):This ratio represents the overall health of the eBTC system by comparing the total value of all collateral in the system to the total debt issued by it.Individual Collateral Ratio (ICR):Contrary to the TCR, this one is specific to each CDP, indicating the ratio between the value of the collateral held in a particular CDP and the debt associated with it.Minimum Collateral Ratio (MCR):The lowest CR that a CDP must maintain to avoid liquidation, set at 110%.Critical Collateral Ratio (CCR):The ratio that triggers Recovery Mode if reached, set at 125%.
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