Aesyx: Parameters

Aesyx Collateral Ratios

Minimum Collateral Ratio (MCR) - MCR is specific to a collateral branch. For example, for an MCR of 155%, a user with $1,000 worth of sAVAX in a Trove can borrow up to $645 AXD against it. When a Trove’s collateral ratio falls below the minimum collateral ratio (MCR) for its branch, it becomes immediately liquidatable.

Total Collateral Ratio (TCR) - TCR is the ratio between the total amount of collateral locked in all troves against the total amount of minted AXD

Critical Collateral Ratio (CCR) - When the TCR of a collateral branch falls below the CCR, the system imposes tighter restrictions on borrowing activity to ensure branch overcollateralization and safeguard overall system health.

Here is the full CCR-based logic:

Action	Logic
openTrove	Opening the Trove must result in TCR >= CCR
closeTrove	Closing a Trove on an active branch must result in TCR >= CCR
adjustTroveInterestRate	When an interest rate adjustment is premature and mints new debt, it must result in TCR >= CCR
_adjustTrove (internal)	- When TCR >= CCR: adjusting a Trove must result in TCR >= CCR - When current TCR < CCR: any new borrowing must result in TCR >= CCR, and any collateral withdrawal of $x must be matched by a debt repayment of at least x AXD

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As a result, when TCR < CCR, the following restrictions apply:

Action	Restriction
openTrove	Opening the Trove must result in TCR >= CCR
closeTrove	Closing a Trove on an active branch must result in TCR >= CCR
adjustTroveInterestRate	Premature adjustments that would mint new debt are disallowed. Otherwise, allowed
adjustTrove	Any new borrowing must result in TCR >= CCR, and any collateral withdrawal of $x must be matched by a debt repayment of at least x AXD
addColl	Allowed
withdrawColl	Disallowed
repayAXD	Allowed
withdrawAXD	Disallowed

Purpose of CCR Logic

• When TCR ≥ CCR, borrower operations are allowed as long as they don’t excessively weaken system health by lowering TCR below CCR.

• When TCR < CCR, only operations that strengthen system health are permitted.

Shutdown Collateral Ratio (SCR) – In extreme scenarios, such as a sharp drop in collateral value or an oracle failure, a collateral branch may be shut down to protect overall system integrity and maintain the stability of the AXD token.

A collateral branch is shut down when either of the following conditions is met:

• Its Total Collateral Ratio (TCR) drops below the Shutdown Collateral Ratio (SCR), or

• One of its external price oracles fails during a fetchPrice call—this includes the call reverting, returning a price of 0, or providing a price that is excessively stale.