How To Generate MCR?Any user can generate MCR tokens by opening a vault on the Land platform by pledging ETH or wBTC (Bitcoin on the Ethereum network) as a collateral security. However, your cryptocurrency is not spent, but stays locked in the vault as a collateral.
Let’s expound the process of token generation step by step.1. You can open your first vault on Land at the following link
https://land.monolith.money by clicking “Create MCR”
2. Choose the type of collateral and follow the on-screen instructions to create your own MCR
3. The surplus collateral can be withdrawn to your wallet, or used to increase your coin holdings.
Important to know:Take note of the following terms:· «Liquidation price» indicates the value of your collateral security that once reached, leads to the liquidation of your vault.
· «% for stability» and «% for liquidation» indicate the commission that you will pay should your vault be liquidated
If the price of your collateral increases, while MCR – being a stable coin – keeps its value, the surplus collateral on your wallet increases. In other words, you gain money on currency appreciation.
If your collateral depreciates and reaches the liquidation price, the vault is liquidated, and your collateral is sold to the market. The proceeds are used to pay for the generated MCR and the “% for stability” and “% for liquidation” commissions. This way even when your collateral depreciates, you only lose a part of it to cover the commission fee!
