Debt Ceiling
Last updated
Last updated
| Collateral Type | Debt Ceiling |
|---|---|
oWEMIX | Updated every 2 hours (Max 1,000,000) |
KLAY | Updated every 2 hours (Max 500,000) |
Debt Ceiling of each collateral refers to the absolute total number of KCD that can be minted for each collateral across the entire Kurrency Ecosystem. Once the total number of KCD minted for a particular collateral type reaches Debt Ceiling, no additional KCD can be minted until Debt Ceiling is updated and adjusted. However, if a portion of KCD is burned via repayment or liquidation, additional KCD can be minted even before Debt Ceiling update, as Remaining Mintable Amount increases by that amount.
Note that Debt Ceiling is set independently for each collateral type. Therefore, even if the total KCD minted against KLAY collateral has reached KLAY Debt Ceiling, it will not affect Debt Ceiling of other collateral types, such as WEMIX.
Actual Debt Ceiling : Total amount of KCD that can be minted with particular collateral type in Kurrency Ecosystem
Remaining Mintable Amount : (Actual Debt Ceiling of collateral A) - (WCD Mint of Collateral A)
High Demand Range : 90% ~ 100% of Actual Debt Ceiling
Appropriate Demand Range : 70% ~ 90% of Actual Debt Ceiling
Low Demand Range : > 70% of Actual Debt Ceiling
Actual Debt Ceiling Change : 20% (Find example below)
Debt Ceiling is updated every 2 hours.
Example 1: If KLAY Debt Ceiling is 1,000,000 KCD, and 950,000 KCD has been minted with KLAY collateral, KLAY is at High Demand Range(95% of Debt Ceiling). Users can only mint up to Remaining Mintable Amount, which is 50,000 KCD, before Debt Ceiling update, KCD repayment or liquidation. Following that, KLAY Debt Ceiling will increase by 20% to 1,200,000 KCD in the next weekly update cycle.
Example 2: If KLAY Debt Ceiling is 1,200,000, and the number of KCD minted with KLAY collateral has decreased to 780,000 KCD, KLAY is at Low Demand Range(65% of Debt Ceiling). The Remaining Mintable Amount at this point is 420,000 KCD, and KLAY Debt Ceiling will decrease by 20% to 960,000 KCD in the next weekly update cycle.
As shown in the examples above, Debt ceiling is updated automatically; but not unlimitedly. As shown as gray dotted line in above diagram, there are Maximum and Minimum Debt Ceiling, at which Debt Ceiling will no longer increase or decrease, respectively. Therefore, although Debt Ceiling for a collateral type that is constantly in High Demand Range will increase, it will not increase above the set Maximum. The same applies to Debt Ceiling of collateral type that is constantly in Low Demand Range, and the Remaining Mintable Amount may vary depending on the Debt Ceiling of each collateral and KCD Mint of each collateral.
Debt Ceiling is set for each collateral type to prevent favoritism towards certain collateral type and to further strengthen the price stability of KCD. For instance, if a malicious attacker utilizes large collateral to sell KCD immediately after mint, KCD price may temporarily fluctuate significantly, causing market disruption. To prevent this and other foreseeable attacks, Maximum and Minimum Debt Ceiling are set for each collateral asset.
