dEURO

# Adjusting a Position

How to adjust a position

Once you are the proud owner of a position, you can adjust it. You can change the outstanding amount (principal), the deposited collateral, and the liquidation price. Where the app offers it, a Max button fills the field with the largest allowed value given the other two values. The liquidation price is tuned with a slider rather than a Max button.

The following rules apply:

  • When increasing the minted amount, new dEURO is minted via mintWithReserve — your wallet receives the usable mint (the principal minus the reserveContribution portion), and the reserve portion is held in the borrowers reserve in your name. You typically get that reserve back when you repay the position. The reserve may be used to cover the system's losses after all equity has been wiped out, which is what gives you a stake in the soundness of the system. The economic cost of holding the position over time is the interest accruing on its principal (V3 charges it only on the usable mint).
  • When decreasing the minted amount, you only need to return part of the dEURO from your wallet — the matching share of your borrowers reserve is dissolved against the remainder. For example, with a reserve ratio of 20%, returning 800 dEURO suffices to close a 1,000 dEURO position, because the other 200 dEURO are taken from the reserve.
  • Interest is accrued continuously in both V2 and V3 positions. When you adjust or repay, outstanding interest is paid first, then the principal is reduced; lowering the principal therefore requires that any accrued interest is covered. The difference between V2 and V3 is the base on which interest is charged: V3 charges interest only on the usable mint (principal minus the reserve contribution), V2 charges it on the full minted amount.
  • When withdrawing excess collateral, observe the dust limit. For example, if the minimum collateral is 1 WETH, the collateral cannot be reduced to 0.9 WETH.
  • There is no limit on how much collateral you can add, but doing so requires the allowance to be set.
  • Increasing the liquidation price will allow you to borrow more, but only after the 3-day cooldown period has passed again, allowing others to challenge your position at the new price before you can use the higher price to mint dEURO.

Adjust position

# V3: Cooldown-free Price Increase via Reference

V3 positions can skip the 3-day cooldown on a price increase by passing a valid reference position to adjustPriceWithReference() (or adjustWithReference() for combined adjustments). A reference position is accepted if:

  • It uses the same collateral and exists in the same minting hub.
  • It is currently out of cooldown with a remaining lifetime of at least its own challenge period.
  • Its price plus a small margin is at least as high as the new price you want to set.

The mechanism is intended for positions tracking the price discovered by other live positions in the system — when the market has already validated a higher price elsewhere, your position does not need to repeat the wait. If the reference does not qualify, the call falls back to the regular cooldown logic.

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