Platform Mechanisms Affecting Balances

A lot of effort was put into making the features of the platform understandable for everyday users. However, some specific aspects may need additional explanations, as from a user's perspective, the behaviour may not be as expected.

Below is a short list of mechanisms which have previously caused questions.

Step In / Liquidation

Both outstanding youves tracker tokens and locked collateral in my vault are lower than before.

The user's collateral in a vault is exposed to the risk of loss. In case the collateral ration drops to the emergency collateral ratio, the step in mechanism / liquidation of the collateral management can be activated by another user. This user can post and immediately burn youves tracker tokens in the vault and gets a bonus out of the excess collateral of the vault.

Example

An example can be found in the collateral management example.

Bailout / Minter Conversion Right

This feature is no longer active in the v3 savings pools.

uUSD disappearing from the savings pool.

The user conversion rights can trigger an involuntary exchange of digital assets. In the case of the bailout / minter conversion right a minter can buy back and immediately burn youves tracker tokens staked in the savings pool / minter conversion pool in exchange for locked collateral at an implied rate of 1.25 * target price.

Example

An example can be found in the bailout / minter conversion right.

Holder Conversion Right

Both outstanding youves tracker tokens and locked collateral in my vault are lower than before.

For uDEFI the holder conversion right only affects those vaults which have opted-in of the conversion feature. The user conversion rights can trigger an involuntary exchange of digital assets. In the case of the holder conversion right, a holder of youves tracker tokens can exchange them against locked collateral from a vault at an implied rate of 0.9375 * target price. The youves tracker tokens are immediately burned in the vault and the tez are taken out of the released collateral.

Example

An example can be found in the holder conversion right.

Stability Mechanism

This is not yet in use.