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Mint kUSD FAQ
Frequently asked questions about minting kUSD and collateralized loans.

Risks

🚨What are the risks of minting kUSD?

Creating a Vault involves using your collateral to mint kUSD. If the Current Price of your collateral falls to or below the Liquidation Price, your assets will be sold to repay the kUSD debit, accumulated Stability Fee and the Liquidation Fee. Also, you can not use your locked collateral to pay back your loan if your Current Price starts to fall towards your Liquidation Price. You will need to contribute more collateral or use other assets to swap and pay back your kUSD.

🚨Are Vaults free to use?

Vaults are not free to use and come with inherent risks. Generating kUSD requires you to pay the Stability Fee. The Stability Fee is a variable rate and is subject to change. To claim your collateral, you must repay the previously generated kUSD and the accumulated Stability Fee.

Key Parameters

What is the Liquidation Price?

The price at which the Vault becomes vulnerable to liquidation. If the Current Price falls to or below this amount, the Vault will be deemed unsafe, and the collateral will then be liquidated (sold) in exchange for kUSD to pay back the vault.

What is the Liquidation Ratio?

The collateral-to-kUSD ratio at which the Vault becomes vulnerable to liquidation. If the Current Ratio falls to or below this amount, the Vault will be deemed unsafe, and the collateral will then be liquidated (sold) in exchange for kUSD to pay back the vault.

What is the Stability Fee?

The fee for minting kUSD. This fee is usually displayed as an annualized rate for indicative purpose only. In reality, it is calculated each block and added to your existing kUSD debit. To close a kUSD vault, you will need to pay back the kUSD minted as well as stability fees accrued.

What is the Liquidation Fee?

If a liquidation occurs, you are required to pay this penalty. The Liquidation Penalty is a disincentive for users to leave a position in danger and acts as an additional safeguard for the stability of kUSD.

What is the Required Collateral Ratio?

The collateral-to-kUSD ratio that must be met in order to mint kUSD.

What is the Current Ratio?

Your current collateral-to-kUSD ratio.

Liquidation

Will I be alerted before my Vault is Liquidated?

No. Ensuring that the assets in your Vault remain safe from Liquidation is entirely your responsibility.

How do I lower my Liquidation Price/Ratio?

If your Vault is close to the Liquidation Price/Ratio, you may either add more collateral or pay kUSD back into their Vault.
If choosing between adding collateral or paying back kUSD, paying back kUSD will increase your collateralization ratio more than contributing an equivalent USD amount of collateral.

Withdrawing Collateral

How do I get my collateral back?

You can get your collateral back buy paying back your kUSD and accrued Stability Fee. Once that is done, you can withdraw your collateral. Learn more by reading the Closing a Vault Guide.

Incentives

Are there any incentives for minting kUSD?

Check out the latest Liquidity Mining programs here.
Last modified 25d ago