📈Minimum Capital Requirement

What is MCR?

The Minimum Capital Requirement (MCR) represents the minimum amount of funds that the protocol needs to have to be assured that it can pay all claims. A minimum MCR value will be set at the launch of coverage pools and the MCR value can never drop below this.

As more Coverage Seekers take out coverage, MCR would increase correspondingly to maintain solvency and ensure that the coverage taken out are sufficiently collateralised.

What does MCR entail?

For starters, no coverage can be taken out by Coverage Seekers until the amount of assets in the coverage pool is equal to the MCR.

At any point in time if the funds in the coverage pool falls below the MCR, Coverage Providers may not be able to withdraw their capital.