# Example

Sample Mechanism with Stability Fee and Liquidation:

1. Ali has 10 AKAD tokens, each pegged to 1 troy ounce of gold.
2. The current gold price is IDR 25,000,000 per troy ounce, making his total collateral worth IDR 250,000,000.
3. The AkadDao product requires a minimum collateralization ratio of 150% for minting Rupya tokens. Ali can mint a maximum of IDR 166,666,666 worth of Rupya tokens (IDR 250,000,000 / 1.5).
4. Ali decides to mint IDR 150,000,000 worth of Rupya tokens, keeping his collateralization ratio at 166.67%.
5. He locks his 10 AKAD tokens in a smart contract Vault within the AkadDao product and receives 150,000,000 Rupya tokens.
6. A 1% stability fee is applied upfront when minting Rupya tokens. In this case, Ali incurs a fee of IDR 1,500,000 (1% of IDR 150,000,000).
7. Ali now has 148,500,000 Rupya tokens (150,000,000 - 1,500,000) to invest in Shariah-compliant projects and investments available on the akad.finance platform.

Now let's consider a scenario where the value of the collateral changes, and the liquidation process is triggered:

1. Assume that the price of gold drops, and the value of 1 troy ounce of gold is now IDR 20,000,000.
2. Ali's total collateral value is now IDR 200,000,000 (10 AKAD \* IDR 20,000,000).
3. His collateralization ratio has dropped to 134.67% (IDR 200,000,000 / 148,500,000), which is below the minimum required ratio of 150%.
4. The liquidation process is triggered to protect the platform and maintain the stability of the Rupya stablecoin.
5. A portion of Ali's collateral is sold off to cover the outstanding Rupya tokens and any associated fees. The remaining collateral, if any, will be returned to Ali once the outstanding Rupya tokens and fees are fully covered.
6. In case Ali wants to avoid liquidation, he can either deposit more AKAD tokens as collateral or repay some of his Rupya tokens to increase his collateralization ratio back above the minimum required threshold.

This example demonstrates the addition of a 1% stability fee and the liquidation process when the collateralization ratio falls below the required minimum.


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