Skip to content

Stable-token ROKS is burned #17

@ctapang

Description

@ctapang

When a trove is liquidated, then depending on system conditions, some of its Stable-token debt gets offset with stable-tokens in the Stability Pool: that is, the offset debt evaporates, and an equal amount of LUSD tokens in the Stability Pool is burned.

Thus, a liquidation causes each depositor to receive a stable-token loss, in proportion to their deposit as a share of total deposits. They also receive a SOL gain, as the SOL collateral of the liquidated trove is distributed among Stability depositors, in the same proportion.

When a liquidation occurs, it depletes every deposit by the same fraction: for example, a liquidation that depletes 40% of the total stable-token in the Stability Pool, depletes 40% of each deposit. A deposit that has experienced a series of liquidations is termed a "compounded deposit": each liquidation depletes the deposit, multiplying it by some factor in range [0,1].

Metadata

Metadata

Assignees

Labels

No labels
No labels

Type

No type

Projects

No projects

Relationships

None yet

Development

No branches or pull requests

Issue actions