Recovery mode

The Stability Pool can serve as a source of liquidity during times of increased demand for the stablecoin. But during Recovery Mode it should fulfill its core function — to be a source of liquidity for liquidations.

When recovery mode triggers

Recovery Mode is entered when the system's Total Collateral Ratio (TCR) falls below 150%.

What changes

Nephrite pauses withdrawals from the Stability Pool during Recovery Mode.

This ensures that Stability Pool depositors will not game the system by collecting rewards during Regular Mode and then running away once the system switches to Recovery Mode — which is exactly the moment liquidity is most needed.

This differs from Liquity, where Stability Pool withdrawals are not paused.