Key Terms From This Episode
Normal Mode:
The standard operating state of the protocol, when the Total Collateral Ratio is above 150%. In Normal Mode, only Vaults with collateral ratios below 110% can be liquidated.
Recovery Mode:
A protective state that activates when the Total Collateral Ratio falls below 150%. In Recovery Mode, any Vault with a collateral ratio below 150% can be liquidated to quickly restore the system's health.
TCR (Total Collateral Ratio):
The ratio of the total dollar value of all ETH collateral across all Vaults to the total USDL debt in the system. TCR determines whether the protocol operates in Normal Mode or Recovery Mode.
Transparent:
Open and visible to all. All Liquid Loans operations are recorded on the Base blockchain, making them fully transparent and verifiable by anyone.
The LL Librarian
Your Genius Liquid Loans Knowledge Assistant