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Liquidation Ratio

The Liquidation Ratio is the minimum required collateralization level for each Vault type before it is considered undercollateralized and subject to liquidation.

Each Vault type’s Liquidation Ratio is determined by a combination of the collateral’s risk profile and the Stability Fee. There may be multiple Vault types for each collateral, with varying Liquidation Ratios and Stability Fees.

Liquidation Ratio = (Collateral Amount x Collateral Price) ÷ Generated pUSD × 100