System Status

The Dynamics of System Status in Lyve

The Lyve front-end displays a "System Status" based on the existing Loan-to-Value (LTV) ratios for different collateral types. These statuses are:

• Normal: Indicates a healthy LTV for a given collateral type.

• Caution: Triggered when the LTV approaches the Maximum System LTV.

• Recovery Mode: Activated when the LTV surpasses the Maximum System LTV.

Each collateral type operates independently, so one could be in Recovery Mode while others are not. 🛡️

Understanding Recovery Mode

Recovery Mode sets in when the total LTV for a specific collateral type in Lyve exceeds the maximum allowable LTV. During this phase, Troves with LTVs over 71.4% can be liquidated. The primary goal is to encourage users to reduce their LTV and to refill the Stability Pool.

How to Keep Your Trove Safe

To secure your Trove, maintain an LTV below 71.4% by either adding more collateral or repaying some LYU debt.

Liquidation Dynamics

Liquidation behavior varies based on several parameters like Individual LTV (ILTV), Maximum LTV (MLTV), and the amount of LYU in the Stability Pool. Here's how it works in different modes and conditions:

• Normal Mode: Liquidation can only occur if your LTV exceeds the Maximum LTV.

• Recovery Mode: Specific rules come into play based on various factors including ILTV, MLTV, and total LYU in the Stability Pool.