Automatic liquidation protection and leverage increase is now live in DeFi Saver [BETA]
We are very glad to introduce our most anticipated and most requested feature: automatic liquidation protection and leveraging is…
We are very happy to introduce our most anticipated and most requested feature: automatic liquidation protection and leveraging is available in DeFi Saver as a beta release starting today!
The feature is called CDP Automation and you can try it right now in our CDP Dashboard. Once enabled, you can configure the lowest ratio you want your CDP to reach, after which Repay would be triggered to protect your CDP from liquidation. However, you should also configure an upper threshold that will trigger Boost once reached and increase the ETH leverage of your CDP. If you don’t feel like setting up all the numbers yourself, you can simply input a target CDP ratio and DeFi Saver will automatically configure safe values for your CDP.
How does it work?
Automated CDP ratio management is made possible with the use of MakerDAO’s DSProxy, a proxy smart contract wallet that’s technically the owner of your CDP. DSProxy was designed so that it enables its owner to allow others to call functions on its behalf. By enabling CDP Automation, you are providing approval for DeFi Saver to use our Boost and Repay features for your CDP — but nothing else.
It’s extremely important to note that the ownership of the CDP never changes when using CDP Automation, you always remain the only owner and your account is the only one that can withdraw collateral or generate more Dai out of your CDP. DeFi Saver can only run Boost or Repay.
You probably noticed that we mentioned this feature is currently in beta. This is mostly due to a lack of testing at scale. However, be it beta or not, we will always recommend checking your CDP manually whenever possible, because we simply cannot make absolute guarantees.
Requirements, fees, and more
You need to meet a few simple requirements so you can activate and use CDP Automation. Firstly, there’s the minimum debt requirement — you need to have a CDP with a minimum 200 Dai of debt. And, secondly, your CDP’s ratio needs to be over 170% or the interface won’t let you activate the service. If you meet these two simple requirements, you’re ready to go.
There is no activation fee or a monthly recurring fee for using CDP Automation. We decided to stick with the system we currently have in place for using Boost and Repay, meaning a service fee of 0.25% is collected each time Automation re-adjusts your CDP, as well as an additional amount equal the gas cost required for that action. We also believe this is the fairest approach for different sized CDPs and hope you agree.
Once you activate CDP Automation, we highly recommend sticking to managing your CDPs exclusively in the DeFi Saver MakerDAO dashboard, as any other dashboards will not be aware of the enabled Automation. The DeFi Saver interface will not allow you to manually re-adjust your CDP in a way that would consequently trigger an action from Automation, but any other will. In case you decide to close your CDP at some point, we also recommend disabling Automation first.
You’re now ready to head on over to our CDP dashboard and check Automation out! We would love to hear all your comments and questions, so feel free to join the discussion below or meet us in the DeFi Saver discord.
💬: Official Discord
📢: Official Twitter account