This isn’t very clear to me either:
15% “credit ratio” means either 15% undercollateralization (in case credit isn’t covered by any collateral or covered by FXS) or 15% overcollateralization (in case the credit is covered by collateral assets) this moves the needle of the protocol design towards undercollateralization or overcollatralization, doesn’t actually provide full backing.
Like I explain in my recent proposal both designs ain’t scalable on their own.
This is why I think it isn’t healthy for FRAX to abandon the Seniorage process but I think, to target and achieve a desirable 100% backing, we need to overlap the undercollateralized design (keeping Seniorage in place) with the overcollateralized design of a money market stable (backing the undercollateralized part with the oversupply of collateral coming from the money market, trough the use of Interest Rates PAID IN FXS and Dynamic Collateral Requirements )