Collateralized Minting

Documentation on minting Decentralized Euros against a collateral.

When someone mints fresh Decentralized Euros against a collateral, we call the result a position (opens new window). New positions are created through one of two governance-approved minting hubs (V2 (opens new window) or V3 (opens new window)) — see Smart Contracts for the full module overview. The notation is inspired by portfolio theory, where a position denotes an exposure to a specific asset. In the Decentralized Euro system, a position always belongs to exactly one owner. Initially, this is the user that created the position, but ownership is transferable through the standard Ownable functions. The owner can deposit collateral into the position and mint Decentralized Euros up to a certain limit defined by the liquidation price. Anyone can challenge a position if they believe that the liquidation price is below the true value of the collateral, triggering an auction that determines the market price of the collateral. Thanks to this mechanism, dEURO does not depend on oracles and is very flexible with regards to the provided collateral.

To get started, open Lending (opens new window) in the app and clone an existing cloneable position type, or pick a parent from Monitoring (opens new window). If you need a new collateral type that is not yet listed, propose one via the form on the Lending page. See Opening New Positions for the full walkthrough.