# FAQ

**How do you calculate the collateral ratio?**

Collateral / Debt = collateral ratio.

**How do you calculate the liquidation price?**

Minimum collateral \* TAD loaned = liquidation price.

**How do you calculate the Liquidation penalty?**

Currently hardcoded at 3% (Subject to Governance).

**How do you calculate the stability fee?** 

[Stability rate](https://testnet-master-1.lamden.io/contracts/con_demo278535_vault/stability_rate?key=0) \*\* 31556926 \* 100 - 100

**How do you calculate the amount of TAD you can loan?**

((Collateral \* TAU) / minimum collateralization) = Amount of TAD$ you can loan

**How do you calculate the TAD Redemption price in dollars?**

Vault total / Vault issued = TAD Redemption price in dollars

**How do you calculate the annual redemption price?**

[Stability rate](https://testnet-master-1.lamden.io/contracts/con_demo278535_vault/stability_rate?key=0) \*\* 31556952 = Annual redemption price (TO BE CONFIRMED)

**Can you deposit & borrow in the same vault or do you need to open a new vault?** 

You will have to open a new vault

**How do you calculate your staked balance?**

TAD Balance \* ([Start Price](https://testnet-master-1.lamden.io/contracts/con_demo278535_stake/rate?key=start_price) \* [Rate](https://testnet-master-1.lamden.io/contracts/con_demo278535_stake/rate?key=rate) \*\* (current unix timestamp - [Start Time](https://testnet-master-1.lamden.io/contracts/con_demo278535_stake/rate?key=start_time))) = My staked balance

 **How do i calculate the APY?**

[Rate](https://testnet-master-1.lamden.io/contracts/con_demo278535_stake/rate?key=rate) \*\* 31556926

**Where are all the liquidated vaults stored?** 

There's no list because that would increase gas costs per vault opened for all users, so the only way is to check every vault number that is less than [Current Number](https://testnet-master-1.lamden.io/contracts/con_demo278535_vault/vaults?key=current_number).

**How do you calculate the amount for closing your own vault?**

(cdp total / cdp issued) + loaned TAD$ = Closing vault amount.

**Auction flowchart:**

![](https://3567767411-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F-MgBjc5jtw60SnAHR2it%2Fuploads%2FqtBa04Wl3BDf9RiRVRZ7%2Fimage.png?alt=media\&token=cef73605-a8da-4108-b91f-864af00e88e4)

**How does the Governance token work?**

This hasn't been implemented yet – Assume Q4 2021 / Q1 2022.

**When is someone set to ‘high risk tolerance? and can every user liquidate vaults or does the system have to do this?**

Every user can liquidate vaults, and the user decides whether or not they have ‘high risk tolerance’ and which path they want to take, the user has two options:

1 - User closes the vault immediately for borrowed TAD and 103% of the TAD’s value in collateral will be given to the user - the remainder will be returned to the original owner

2 - User starts an auction, and people can bid on the auction until it has more than 1 bid and has lasted for 7 days, after which the auction resolves as described in the flowchart.