# What is TCAP?

TCAP is an ERC20 token that tokenizes the Total market capitalization of the entire cryptocurrency market. TCAP can be thought of as a market index that uses an oracle to track the price of the total cryptocurrency market. The Total cryptocurrency market cap currently values in trillions of dollars. To make it a nominal asset, the value is divided by a divisor. For example, if the total crypto market cap resides at 350 billion dollars, then we add a divisor to that number, just like the S&P 500 or any major financial index would. The price calculation for TCAP is as follows:

$c$ = $350,000,000,000 $d$ = 10,000,000,000 $r$ = $\frac{c}{d}$ =$35.00

Where $c$ is the total cryptocurrency market cap, $d$ is the divisor and $r$ is the TCAP token price.

TCAPs are then minted upon being collateralized by an underlying asset, such as ETH or DAI. What the user receives in return is a newly minted asset nominalized token that moves in real time to the price of the underlying total market cap metric is tracking. Each TCAP is algorithmically collateralized by a corresponding amount of ETH or DAI needed to appropriately back each token, thus creating price exposure to the entire cryptocurrency sector with the single push of a button.

TCAP is currently deployed on Ethereum mainnet.

#### Types of Vaults#

TCAP has two kinds of vaults, low-risk vaults and high-risk vaults. The low-risk vaults are called Regular vaults, and the high-risk vaults are called hard-mode vaults. The regular vaults have a collateralization ratio between 150-200%, and a liquidation penalty is 10 %. The hard-mode vaults have a collateralization ratio of 125% and a liquidation ratio of 19%. The hard-modes vaults allow minting with more capital efficiency because of low vault ratios, but they penalize very heavily during liquidations

#### Supported Collaterals#

The regular vaults support ETH, DAI, WBTC, AAVE and LINK as collaterals. The hard-mode vaults support ETH and DAI as collaterals.

#### Minimum Vault Ratio#

All hard-mode vaults have a minimum vault ratio requirement of 125%. All regular vaults have a minimum vault ratio requirement of 200%, except ETH, which has a requirement of 150%.

#### Liquidation Penalty#

TCAP regular vaults have a liquidation penalty of 10 % and the hard-mode vaults have a liquidation penalty of 19%.

#### Fees#

TCAP regular vaults have a burn fee of 1 % and the hard-mode vaults 0f 0.05%. The fee is charged as a percentage of the amount minted in ETH. The DAO owns the revenue generated through these fees.