Liquidation

At BitUSD, we prioritize the stability of our stablecoin and the solvency of our project. That's why we have implemented a liquidation mechanism to ensure that the collateralization ratio remains at or above the minimum threshold of 120%.

In the event that a user's collateralization ratio falls below 120%, our smart contract automatically triggers the liquidation of their collateralized BTCB tokens. These liquidated tokens are then transferred to the project's treasury, ensuring that the stablecoin's value remains stable and that the project remains solvent.

This mechanism is designed to protect both the user and the project from market volatility and ensure that the btcUSD token remains a secure and stable store of value. By requiring a high collateralization ratio and implementing a liquidation mechanism, we can mitigate the risks associated with market volatility and provide users with a reliable and trustworthy stablecoin.

The liquidation mechanism of BitUSD is a vital component of our stablecoin. By triggering the liquidation of collateralized BTCB tokens when the collateralization ratio falls below 120%, we can ensure the stability of the btcUSD token's value and the solvency of the project. This mechanism provides users with a secure and stable store of value and ensures that the BitUSD project remains a trustworthy and reliable option in the decentralized finance space.