# R Token Collateralization Ratio

**Overview**

This indicator monitors the ratio of RToken minted to the RToken’s deposits used as collateral backing it. It ensures that the RToken is fully collateralized at all times to sustain its intended peg.

The indicator is calculated as the ratio of the RToken market cap  to the  value of the collateral and stRSR backing the RToken.

**How can I use it?**

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Monitoring this ratio is essential to maintain the stability and credibility of the RToken. If the collateralization falls below 100%, it could threaten the RToken’s peg, leading to loss of trust and potential market disruptions. Maintaining overcollateralization is key to ensuring stability and integrity in the associated ecosystem.

Drops in collateralization ratio could indicate that there is a peg issue in one of the underlying collaterals of the RToken or that there has been unstaking of stRSR that helps secure the token.


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