Managing Your Position

To maintain a healthy position, it is also important to monitor the value of the assets in your position and make adjustments accordingly. This means being cognizant of the market value of your collateral and adjusting your position accordingly if need be to ensure that it stays within the required limits.

Now that you are familiar with relevant ratios and metrics, let’s discuss how you can keep your position healthy and avoid the risk of liquidation (assuming that is your goal).

Firstly, it is important to maintain a healthy Personal Collateral Ratio (CR) for each position. This means keeping your CR above the minimum required amount for each asset in your position, as represented by each asset’s Minimum Collateral Ratio (MCR) discussed in the previous section.

By maintaining a healthy position, you ensure that you have enough collateral to cover any potential losses or fluctuations in the asset’s value. If you are not comfortable with the health of your position, or your position is at risk of being liquidated, you may want to take steps to manage it. Similarly, managing your position could include borrowing more ERN or withdrawing some collateral to decrease your CR in a situation where you feel comfortable doing so.

To manage a position, simply click the ‘Edit’ button on the desired position, then proceed in the same manner by clicking the edit button icons either on the collateral side or the ERN side. This will give you the option of withdrawing/adding collateral, or repaying/borrowing ERN.

Additionally, it is important to keep track of the Critical Collateral Ratio (CCR) and take appropriate action if necessary. When the TCR falls below the CCR, recovery mode is activated, which means that any position below the CCR may be liquidated. To avoid liquidation, you should consider adding more collateral to your position to bring the TCR back above the CCR.

If recovery mode is active, it is important to be aware of your position in regards to the increased liquidation threshold. It is important to note that, during recovery mode, liquidations happen at the MCR and the user keeps the difference.