Debt Ceiling
Last updated
Last updated
| Collateral Type | Debt Ceiling |
|---|---|
WEMIX | Updated every 2 hours (Max 1,200,000) |
stWEMIX | Updated every 2 hours (Max 300,000) |
WEMIX$ | Updated every 2 hours (Max 500,000) |
Debt Ceiling of each collateral refers to the absolute total number of WCD that can be minted for each collateral across the entire Kurrency Ecosystem. Once the total number of WCD minted for a particular collateral type reaches Debt Ceiling, no additional WCD can be minted until Debt Ceiling is updated and adjusted. However, if a portion of WCD is burned via repayment or liquidation, additional WCD can be minted even before Debt Ceiling update, as Remaing Mintable Amount increases by that amount.
Note that Debt Ceiling is set independently for each collateral. Therefore, even if the total WCD minted against WEMIX collateral has reached WEMIX Debt Ceiling, it will not affect Debt Ceiling of other collateral types, such as ETH.
Actual Debt Ceiling : Total amount of WCD 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 : 5% (Find example below)
Debt Ceiling is updated every 2 hours.
Example 1: If WEMIX Debt Ceiling is 500,000 WCD, and 480,000 WCD has been minted with WEMIX collateral, WEMIX is at High Demand Range(96% of Debt Ceiling). Users can only mint up to Remaining Mintable Amount, which is 20,000 WCD, before Debt Ceiling update, WCD repayment or liquidation. Following that, WEMIX Debt Ceiling will increase by 5% to 525,000 WCD in the next update cycle.
Example 2: If WEMIX Debt Ceiling is 800,000, and the number of WCD minted with WEMIX collateral has decreased to 400,000 WCD, WEMIX is at Low Demand Range(50% of Debt Ceiling). The Remaining Mintable Amount at this point is 400,000 WCD, and WEMIX Debt Ceiling will decrease by 5% to 760,000 WCD in the next update cycle.
As shown in the examples above, Debt ceiling is updated periodically; 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 WCD 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 WCD. For instance, if a malicious attacker utilizes large collateral to sell WCD immediately after mint, WCD 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.
