I would like to raise a question concerning where we

can find the detailed game rules for vault, forced liquidation and auction. Remo has just published a video advising against using vaults. He believes that leverage is one of the biggest risk and that he would like to sleep better than earning more. My viewpoint is different from his. I use vault and maintain my collateralization ratio averagely between 153-155%, especially when I am awake. I have heard once in a YouTube Video that one can balance his collateral within the six hours of the auction period that is mandatorily and automatically initiated when the value of one's collateral lower than that the minimal collateralization ratio requires. But I never find any official document that clearly describes the game rules for related issues. If it is true that one would not lose his collateral by raising the collateral ratio within the auction time (6 hours?), then it is truly safe for one to sleep through the night with the above-mentioned low collateral ratio (between 153-155%) without fearing that one will be liquidated when falling asleep.

Normally I maintain at least 250% for my 150% vault, crypto market is extremely volatile, 153-155% may not have enough leeway to absorb the sudden drop of the market, and you may not have enough time to do any necessary adjustments

I am aware that the total collateralization ratio is ca. 199% as revealed in DefiScan. But I try to find the possibility to maximize the passive income without compromising the peace of mind as Remo suggested. That said, I am still of different opinion from yours to the extent that I don't think we have not enough time to do the necessary adjustments. Firstly, the ratio is adjusted every 60 minutes on the base of the oracle prices of the underlying tokens in the collateral. Secondly, one can make use of DefiChain Dobby to be informed through its in-time notification of your ratio to get oneself ready to do any necessary change. Last but not least, even if one's ratio is below the 150% threshold and forced to be liquidated, one can save his collateral if the following rule applies, i.e. if one is allowed to remove dTokens from his LM to payback loans and/or to increase his collateral. My question is therefore whether this rule does exist and how it functions in detail.

Yeah everyone has their own strategy to the game, for me if can I would not want to go to the route of being liquidated and trying to save my collateral back even there is a way to do so. Plus, you are also mentioning your focus is to slp better with peace of mind, don't over leverage is the way for it to happen. Perhaps I just being lazy 😅 maybe others can help you?

thank you for your friendly exchange with me. I don't think you are lazy, because safety is safety. Peace of mind shall always be the first priority. But I hope our peace of mind is built upon solid knowledge of the objective rules, not upon some subjective conjectures. Therefore, I am still waiting for some moderators to answer my question. If I get a clearer picture, I will also share it here again with you and other community members

Here is the official document on vaults, liquidations and auctions. Personally I would highly discourage anyone running a vault at 153 percent or so, just a very risky way to roll. You have just one hour to react if you vault collateral or minted token oracles post an upcoming change that will put you into default. Not sure where you got 6 hours from. If you're closely monitoring you vault with Dobby or Defichain- income you can have a little warning. But once liquidation happens, you'll have to try to win it at auction if you want to recover your collateral. You'll be competing against others who might outbid you. Minimum penalty for default is 5% loss, assuming you can win the bid at auction. Here's the link to how it works https://github.com/DeFiCh/pinkpaper/blob/main/loan/README.md

Here is the information on the vaults, liquidations and auctions https://github.com/DeFiCh/pinkpaper/blob/main/loan/README.md

I have read the pinkpaper. I am not quite sure if I fully understand it. there is one sentence in the methodology: "When a vault is in liquidation mode, it can no longer be used until all the loan amount is repaid before it can be reopened. Interest accrual is also stopped during liquidation process." Does it mean that the owner of the vault can pay the total loan during the aution period to have his vault reopened or he has to take part in the aution to bid competitively with others without any privelege and he can then keep his collateral only when he is the top bid, plus with the burden of liquidity penalty?

He can only take part in the auction and has to bid to get his collateral back