How To: Create a CDP on Unit Protocol with LDO as collateral
Unit protocol recently added the Lido DAO token (LDO) as collateral for their Collateralized Debt Positions (CDP).
Users can now deposit LDO into Unit Protocol and mint the stablecoin USDP. this post will go through the process step by step.
Creating a CDP
Start by navigating to the Unit Protocol website, unit.xyz.
1. Before interacting with the protocol you will need to accept the Terms of Service and connect your wallet in the top right corner.
2. Click on LDO in the list of assets types to load the CDP page for LDO.
3. Scroll down to the "Deposit collateral and Borrow USDP" section and enter the amount of LDO you wish to deposit and the amount of USDP you wish to borrow. Note how the liquidation price increases towards the current price of LDO as more USDP is being borrowed.
A higher utilization ratio allows users to borrow more USDP but also exposes the user to higher liquidation risk. If the price of LDO falls below the liquidation price, and you do not add additional funds, your CDP will be subject to liquidation. Read more here.
4. Click Execute after you’ve entered an amount of LDO and USDP you're comfortable with and sign the transactions from your wallet. After the transactions have been confirmed the CDP is created and USDP will appear in your wallet.
5. If you are using Metamask you might have to add the USDP token to your token list to see your balance. Open the transaction details on Etherescan and click the USDP Stablecoin contract address.
6. Click Copy address, open up Metamask and add it as a Custom Token.
The amount you need to repay to withdraw your collateral will be equal to the borrowed USDP amount + stability fee for the period.
1. Visit unit.xyz and click on LDO from the list of asset types.
2. Scroll down to the "Repay USDP & Withdraw collateral" section. Enter the amount of USDP you wish to repay and click Execute. After you’ve signed the transaction from your wallet your collateral will get withdrawn as soon as the transaction has been confirmed.