4️⃣Borrowing (Minting) USDEFI
Last updated
Last updated
The DCNTRL Protocol allows users to mint USDEFI, a stablecoin pegged to the US dollar, by depositing BNB as collateral. This guide will walk you through the process of minting USDEFI, managing your position, and adjusting your collateral ratio.
Once you have learned how to Mint USDEFI, learn how you can start earning with it by staking in the DCNTRL stability pool by clicking here!
To mint USDEFI, follow these steps:
Navigate to the DCNTRL Protocol dashboard and hit 'Open Mint!
You will need BNB to mint USDEFI if you don't have any check out our guide here!
In the "Add Collateral BNB" input field, enter the amount of BNB you wish to deposit as collateral.
Next up, enter the amount of USDEFI you want to mint from your supplied collateral.
As you're entering these values you'll get to see the values of your mint change accordingly.
Liquidation Reserve: To add more BNB to your position, enter the amount of BNB you wish to add and click on the "Increase Collateral" button. Confirm the transaction in your wallet.
Borrowing Fee: This amount is deducted from the borrowed amount as a one-time fee. There are no recurring fees for borrowing, which is thus interest-free.
Total Debt: The total amount of USDEFI your MINT will hold. You will need to repay 8,800.00 USDEFI to reclaim your collateral (200 USDEFI Liquidation Reserve excluded).
Collateral Ratio: The ratio between the dollar value of the collateral and the debt (in USDEFI) you are depositing. While the Minimum Collateral Ratio is 110% during normal operation, it is recommended to keep the Collateral Ratio always above 150% to avoid liquidation under Recovery Mode.
A Collateral Ratio above 200% or 250% is recommended for additional safety.
Once you're happy with your USDEFI mint click on the "Confirm" button. This will initiate a transaction request.
Confirm the transaction in your wallet. Once the transaction is confirmed, USDEFI will be minted and added to your wallet.
After minting USDEFI, you can manage your position using the "adjust" button. Here, you can:
Add Collateral: To add more BNB to your position, enter the amount of BNB you wish to add and click on the "Increase Collateral" button. Confirm the transaction in your wallet.
Remove Collateral: To remove some BNB from your position, enter the amount of BNB you wish to remove and click on the "Decrease Collateral" button. Confirm the transaction in your wallet. Note that this may increase your risk of liquidation if it lowers your collateral ratio below the safe threshold.
For more detailed information on managing your position, please refer to our dedicated guide:
Remember, the DCNTRL Protocol is designed to be flexible and user-friendly, allowing you to manage your positions according to your needs and risk tolerance.
Always keep an eye on your collateral ratio and ensure it stays above the safe threshold to avoid being liquidated.
To repay some or all of your USDEFI debt click on the "Repay USDEFI" button. From here you can enter the amount of USDEFI you wish to repay and . Confirm the transaction in your wallet. This will close your mint and release your BNB collateral.
You might need more USDEFI than you originally minted to cover the redemption fees of your position. To do that you'll just need to swap more USDEFI rather than minting it! Find out how to do that here!
Remember, the DCNTRL Protocol is designed to be flexible and user-friendly, allowing you to manage your positions according to your needs and risk tolerance. Always keep an eye on your collateral ratio and ensure it stays above the safe threshold to avoid liquidation.
A Loan Position is the process where you obtain and manage your loan. Each Loan Position is associated with a Binance Chain address, and each address can maintain only one Loan Position. If you've used loan positions or CDPs on other platforms, the concept of Loan Positions is similar.
Loan Positions keep track of two balances: one is an asset (BNB) serving as collateral and the other is a debt denominated in USDEFI. You can adjust these amounts by adding collateral or repaying debt. As you make these balance alterations, your Loan Position's collateral ratio changes correspondingly.
You can close your Loan Position at any time by completely repaying your debt.
Every time you withdraw USDEFI from your Loan Position, a one-time borrowing fee is applied to the withdrawn amount and included in your debt. Please note that this borrowing fee is variable (determined algorithmically) and has a minimum of 0.5% under standard operation. The fee is 0% during Recovery Mode.
A 50 USDEFI Liquidation Reserve fee will also be applied but will be refunded to you upon full debt repayment.
Another factor to consider is the market price of USDEFI at the time of repayment. If USDEFI is trading at $1.02 when you're ready to repay your loan and you need to purchase it, you're effectively incurring a 2% 'fee'. This can be avoided by having your borrowed funds ready or by waiting for USDEFI to return to its pegged value.
