# Protocol Modes

## Modes Overview

The BSD Protocol operates in different modes depending on the overall health of the system (Total Collateral Ratio - TCR) and administrative actions. These modes affect certain operations like borrowing or interacting with the protocol via smart contracts: 

<table><thead><tr><th width="139.02178955078125">Mode</th><th width="185.0687255859375">Entry/Exit Criteria</th><th>Purpose</th></tr></thead><tbody><tr><td><strong>Normal</strong></td><td>TCR ≥ 125%</td><td>Full protocol functionality</td></tr><tr><td><strong>Recovery</strong></td><td>TCR &#x3C; 125%</td><td>Blocks creation of low CR debt and incentivizes users to borrow with higher CR</td></tr><tr><td><strong>Maintenance</strong></td><td>Admin</td><td>Withdraws only. Intended for protocol upgrades. </td></tr><tr><td><strong>Paused</strong></td><td>Admin</td><td>Emergency pause</td></tr></tbody></table>

## **Recovery Mode**

Individual vaults have a minimum collateral ratio of 110%. Similarly, the global state of all vaults in the BSD protocol has a minimum collateral ratio, Total Collateral Ratio (TCR), of 125%. TCR is the dollar value of all collateral divided by the dollar value of all debt. Recovery Mode is a temporary state that activates when the TCR < 125% and deactivates when TCR ≥ 125%

Recovery mode only affects the behavior of vaults and borrowing:&#x20;

* Borrowing fees are set to 0%. Redeem fees are unchanged.
* New debt can only be created ≥ 150% collateral.
* Collateral can only be removed if a specific vault CR remains ≥ 150%
* Repaying debt and adding collateral function normally.

## Maintenance mode

Intended for protocol maintenance such as contract upgrades or migrations.&#x20;

* Blocks borrowing (`mint-loan-wrapper` )
* Blocks adding collateral (`add-collateral-wrapper` )
* Blocks updating the interest rate (`update-interest-rate-wrapper` )
* Repaying debt allowed (`repay-loan-wrapper`)
* Redeeming BSD allowed (`redeem-wrapper`)
* Withdrawing collateral allowed (`withdraw-collateral-wrapper`).
* Stability pool withdrawls allowed.

## Paused Mode

Emergency stop due to exploit, oracle failure or similar unforeseen problems. Blocks *all* user-facing actions including borrowing, redeeming, repaying, withdrawing, and stability pool interactions.


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