Collateralized Vaults: TINU Minting & Burning
UNIT vaults are collateralized using assets admitted by The UNIT governance. Currently, ETH is the sole collateral source, but The UNIT governance will soon consider other collateral sources, such as the native tokens of BSC, Polygon, Near, and others. To mint TINU, participants must deposit ETH into UNIT vaults.
Each vault only contains one particular asset and a set of risk parameters to ensure the stability of TINU:
- Debt Ceiling
- Liquidation Ratio
- Liquidation Fee
The minimum collateralization level to mint TINU depends on the 1-year price range in UNIT of the asset used in the particular vault. This ensures that the vault will be protected against high-volatility events.
TINU is burned to retrieve the collateral in the vaults. Every time TINU is burned, a fee depending on the staking level will be charged and distributed to the remaining staking participants.