Recovery Mode

Kurrency tracks KCD Price at all times through various price feeds from DEXs, oracles and more. If KCD Price falls below $0.98, Kurrency immediately executes 'Recovery Mode' contract. Recovery Mode is a powerful tool for maintaining KCD Price, which temporarily suspends all KCD mint for 10 minutes, and temporarily increases Base Stability Fee(BFS) for each collateral.

Suspension of KCD mint

• KCD supply does not increase due to suspension of KCD mint.

• Demand for KCD can only be met through purchase in the market — not mint.

• Increase in KCD buy in the market increases KCD Price, bringing it closer to 1 USD again.

Temporary increase in KCD Base Stability Fee

• To incentivize KCD Repayment, Base Stability Fee for each collateral is temporarily increased.

• In addition to decrease in KCD supply through repayment, purchasing KCD from the market for repayment also increases KCD Price and allows it to return to 1 USD.

KCD price	Additional Base Stability Fee Rate
0.97 < KCD Price < 0.98	50%
0.96 < KCD Price < 0.97	75%
0.95 < KCD Price < 0.96	100%
0.94 < KCD Price < 0.95	150%
0.93 < KCD Price < 0.94	200%
0.92 < KCD Price < 0.93	300%
KCD Price < 0.92	400%

Kurrency checks KCD Price every 10 minutes. When KCD Price returns to above 0.98 USD after Recovery Mode has been triggered, Recovery Mode is released and Stability Fee is returned to normal.

Recovery Mode Scenario

1. A user mints KCD with KLAY as collateral

2. Assume the user’s Stability Fee is 3% before Recovery Mode (BFS 10% - Asset Management Profit 7%)

3. KCD Price temporarily drops to 0.979 USD

4. Recovery Mode triggered : KCD mint is suspended, and BFS increases to 60% (10% + 50%)

5. The user’s Stability Fee increases to 53% (BFS 60% - Asset Management Profit 7%)

6. Similarly, Stability Fee of all users is increased, resulting in increased KCD buy in the market

7. KCD Price recovers above 0.98 USD

8. ‘Recovery Mode’ released, and Stability Fee returns to normal.