⚙️Managing your USDEFI Position
After minting your USDEFI you can adjust the collateral ratio. The collateral ratio is the ratio of the value of your BNB collateral to your USDEFI debt. It's crucial to maintain a healthy collateral ratio to avoid liquidation. You can adjust your collateral ratio by adding more BNB to your position or repaying some of your USDEFI debt.
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.
For additional safety, a collateral ratio above 200% or 250% is recommended.
Adjusting Your USDEFI collateral ratio:
After minting USDEFI, you can manage your position easily using the "Adjust" button.
Add Collateral: This option allows you to increase the health of your USDEFI balance and reduce the risk of liquidation. It allows you to supply more BNB to your position.
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.
How to Increase Collateral:
To reduce the risk of liquidation one of the things you can do on DCNTRL is increase your collateral. In simple terms this just means supplying more BNB deposit to support your USDEFI mint position. By adding more BNB you will increase your collateral ratio.
To add more BNB to your position, ensure 'add collateral' is selected and enter the new total amount of BNB you wish to supply in the "collateral" area. Here we have increased the amount of BNB we want to supply to 202 👇
As you adjust this figure you can see how the proposed changes will impact the health of your position. Here because we are doubling the amount of BNB we are supplying as collateral our Collateral Ratio doubles, which means we are much safer from being liquidated.
Once you are satisfied with the new amount of collateral click on the "Confirm" button. Confirm the transaction in your wallet.
Increasing your Collateral is a great way to reduce the risk of liquidation.
Decreasing Collateral:
This allows users to receive more liquidity from the DCNTRL Network from their initial deposit, it can be done in two ways. The first is by minting more USDEFI against your original deposit, the second is by removing your BNB collateral. We will cover both methods below...
1️⃣ Minting more USDEFI against your original deposit
To mint more USDEFI against your supplied we first need to make sure we're in borrowing mode. To do this ensure that the 'borrow USDEFI' tab is selected.
BNB simply increase the figure in the 'net debt' - area. Here we have increased the amount of USDEFI we want to mint to 16,500 👇
As you adjust this figure you can see how the proposed changes will impact the health of your position. Here because we are doubling the amount of USDEFI we are minting our Collateral Ratio halves, which means we are closer to being liquidated.
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.
For additional safety, a collateral ratio above 200% or 250% is recommended.
Once you're happy with the new amount click on the "confirm" button & confirm the transaction in your wallet to receive the additional USDEFI.
2️⃣ How to Remove Supplied BNB :
The other way to access more liquidity from your original mint is to remove some of the original BNB deposit. This will return some of the supplied BNB back to your wallet without reducing the USDEFI you have already minted.
To remove some of your supplied BNB decrease select the 'remove collateral' option.
Here we have decreased the amount of BNB in the figure in the 'Collateral BNB' - area. we want to remove to 60BNB
If you don't want to repay any USDEFI, ensure that the 'repay USDEFI tab states 0.00
As you adjust this figure you can see how the proposed changes will impact the health of your position. Here because we are reducing the amount of BNB we are supplying to support our mint our Collateral Ratio halves, which means we are closer to being liquidated.
Closing the Mint & Repaying Debt
To repay some or all of your USDEFI debt, hit the repay USDEFI function & enter the amount of USDEFI you wish to repay.
If you hit 'Max' in this field it will enter the amount of USDEFI required to close your entire mint - to do this you might need to get more USDEFI first. This can be swapped off the open market.
Once you are happy with the amount of USDEFI you want to repay hit the "Close Mint" button. Confirm the transaction in your wallet. This will close your mint and release your BNB collateral.
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.
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