Margin & Collateral
CDP mechanics, MCR, MSSR, and target collateral ratio for SbAssets
Margin & Collateral
The margin system applies exclusively to Market-Pegged Assets. Spot trades of User-Issued Assets have no margin or collateral requirements.
Users create SbAssets by locking collateral via call_order_update_operation. Two protocol ratios govern CDP health: the Maintenance Collateral Ratio (MCR), the minimum ratio before a margin call fires, and the Maximum Short Squeeze Ratio (MSSR), the upper limit on the margin call execution price that protects shorts from excessively penalising fills.
An optional target_collateral_ratio (TCR) parameter controls how much collateral is sold when a margin call fires. Without TCR the entire position is liquidated; with TCR only the minimum required amount is sold to restore the position to the target ratio.