Vault Ratio#
The vault ratio is defined in the following way:
LetCa​betheamountofcollateraldepositedCp​bethepriceofthecollateralDa​betheamountofdebtMintedDp​bethepriceofthedebtVr​bethevaultratioVr​=Da​∗Db​Ca​∗Cp​​×100​ Liquidation#
The Index token needed to liquidate a vault is:
LetDL​betheamountofindextokenneededtoliquidateavaultLp​betheliquidationpenaltyDL​=Dp​(Vr​−Lp​−100)Da​Dp​Vr​−100Ca​Cp​​​ The reward received is given by:
LetCr​betheamountofcollateralreceivedasrewardCr​=100Cp​Dp​(Vr​−Lp​−100)(Da​Dp​Vr​−100Ca​Cp​)(Lp​+100)​​ Fees#
The mint fee and the fee are calculated in the following way:
LetBf​betheburnfeepercentageLetMf​bethemintfeepercentagemintFee=100Ep​Ca​Cp​Mf​​BurnFee=100Ep​Ca​Cp​Bf​​ Math Derivation#
For the derivation of the formulae please refer to this medium article