New Feature | Buy and Generate DAI on the CDP Portal now on imToken
Are you still hodling on to your ETH? The new CDP Portal lets you leverage your holdings to create the DAI stablecoin. Save DAI or use it to leverage trades, all within your imToken wallet.
MakerDAO recently announced their new DApp for creating the Dai stable coin and managing your CDPs. Along with the MakerDAO team, we present to you the seamlessly integrated experience of generating Dai directly within your imToken 2.0.
Using the how-to below, you will be able to not only generate Dai in a few steps, but also leverage this Dai to buy ETH.
You can buy DAI on an exchange.
Dai is a stablecoin: A cryptocurrency that promises a fixed price and currently 1 Dai is pegged to 1 US dollar.
Dai offers an option for traders or users to hedge their cryptocurrency price exposure during times of extreme price volatility. Trading assets between DAI and BTC or ETH allows traders to maneuver through the highs and lows of cryptocurrency prices.
Unlike that of USDT or USDC, DAI is decentralized, and it’s pricing mechanism is built on top of the Ethereum blockchain, which secures the promise that no unwanted third party can change the rules by which Dai is being held stable. Dai is backed by collateralized assets held within a smart contract, always ensuring the integrity and transparency of the value of every single Dai circulating in the market.
If you are interested in Dai, you can simply buy Dai on your favorite exchange: Using imToken you can enter your desired DAI amount on the Market view or even use Bitcoin to buy DAI on Coinswitch using the Browser view.
Buying Dai was easy, wasn’t it? The following tutorial will show you not only how to buy Dai, but to generate Dai itself.
Locking ETH into a CDP lets you create DAI.
We all get loans for different reasons: People might want to buy a new car, a house or even want to buy more Bitcoin.
Have you heard of PJ though, who bought a car using a loan created using the CDP mechanism? Here you go:
Curious how to start engaging with CDPs? The Dai Stablecoin System allows for opportunities for both profit-seeking…medium.com
Similar to a bank, the new CDP Portal of MakerDAO lets you lock up collateral to issue money (DAI). The collateral (currently ETH) is locked up in a Collateralized Debt Position ( CDP) until you pay back the DAI you generated.
Using this mechanism, you can now generate DAI, without giving up ownership of your ETH, as long as you make sure that the collateral value stays higher than the outstanding DAI (currently 150%).
The newly created Dai can be used to trade leveraged.
After you determined how much ETH you want to lock up in the CDP, you specify an amount of DAI to be created. The more ETH you deposit, the more DAI can be generated.
You pay back the Dai stablecoins together with a stability fee (currently around 2.5% per year), to then withdraw the collateral that you locked up.
After opening the CDP by locking up ETH, you can now withdraw DAI from the CDP! The Dai is sent directly into your imToken wallet.
You now created more money out of the ETH that you hold anyway! As mentioned above, you can use it to hold a more stable value than other cryptocurrencies, but you can also use it to re-invest in ETH or any other cryptocurrency. To do that, simply wait a minute for the DAI to arrive into your wallet, and exchange it against another currency on your favorite exchange directly within imToken!
Congratulations, you just bought cryptocurrency using leverage. But always be careful: In case the price of your collateral declines, leaving your collateral ratio below 150%*, you need to pay back your loan or put more ETH into the CDP. If you miss this, the DAI mechanism sells your collateral to secure DAI’s value.
For a step-by-step guideline, watch our video below.
Again, pay attention to how much Dai you withdraw from the CDP! The more Dai is withdrawn, the lower the collateralization ratio gets and the easier your collateral is liquidated to cover your outstanding Dai.
To see the collateral ratio of any CDP, including your own, visit MakerDAO’s website here.
imToken is the world’s largest Ethereum digital asset wallet, whose users produce ~10% of all Ethereum transactions. imToken provides access to Ethereum, BTC and EOS.
Our amazing new imToken 2.0 International introduces features, such as:
- BTC Segwit, ETH, EOS wallet support
- Address book synchronized over IPFS
- Native DEX integration: Tokenlon
- Secure Cold Wallet setup
- Updated DApp browser
- DApp News Feed
In case of questions, write us an Email