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Redeeming AGOBTC & AGOUSD
The process of redeeming implies returning the collateralized tokens AGOUSD / AGOBTC back to the protocol and, in return, receiving back the user's collateral assets and the required amount of share tokens CNBTC / CNUSD, which are required to reach desired equality. This in turn means that with every $1 value, users will receive part of the collateral together with the part of share tokens.
The redeeming formula works based on the Effective Collateral Ratio (
ECR) and applies for both algorithmic tokens:
Now, let's take a look at the following situations, using different input data.
- ECR - 100%
- USDT price - $1.00
- ECR is equal to 80%
- WBTC price - $59,000.00
- CNBTC - $18,000.00
- The user wants to redeem 1 AGOBTC
Summarizing all the above, when the user redeems 1 AGOBTC, he receives 0.00001356 WBTC and 0.00001111 at the WBTC price - $59,000.00 and ECR level of 80%.
The basic redeeming fee is configured to 0.4% but can be decreased to 0.2% by holding the AGO governance token on the wallet.