With the unique design of our partially-collateralised stablecoin, the collateral ratio can be reduced depending on the market demand for IRON tokens. Comparing between Effective Collateral Ratio (ECR) and Target Collateral Ratio (TCR), the protocol will sometimes see situations where it can be under-collateralised. To use our collateral assets in the most effective way, we implement 2 unique features, vaults and re-collateralise.
The protocol automatically invests a maximum of 75% of the USDC collateral to generate a passive income to the TITAN single token staking pool, in other words, to the share-token holders. However, the income the vaults receive from the invested USDC collateral, can also be used to to increase the ECR, to increase the amount of USDC collateral the protocol has.
The system can be under-collateralised in a situation where the TCR is increased after the system was running with a lower TCR for a long period of time. In this case, the
rebalance function can be triggered to sell the amount of locked TITAN or STEEL tokens in Treasury to achieve a sufficient amount of required USDC or BUSD collateral.