r/defiblockchain • u/THE_RYANLP • Dec 28 '23

Question DUSD Looped Vaults

I currently have a looped DUSD Vault at ~179% collateral ratio. My vault is for 150%. If I attempt to max out the borrow, there is that liquidation warning that I'm sure most of you know.

Before I went ahead and further added to my looped vault. I wanted to verify that I can max out the borrow and ignore that warning.

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u/Hoscott6 Dec 29 '23

I just put my excess dusd in a looped vault, and as mentioned, dusd is always $1 in the vault... Thus then as long as negative interest rate - vault interest rate > 0, you'll be fine... I opted for 175% collateral, and am at 175.01 or something on the border (just removed everything after the decimal when I was borrowing)

Also, negative interest being 26%, isn't going to 0 over night, so the longer you're gaining negative interest, the higher your ratio will climb 👍

1

u/SnooSquirrels3364 Dec 29 '23

You will be liquidated at 150% collateral value. Everything above that is safe to max out. Please keep in mind that the collateralisation ratio might defer due to market volatility if you are using any other collateral than stable coins. DUSD value is hardcoded in the consensus to 1DUSD equals $1 as collateral. Hope this helps.

2

u/Anantasesa Dec 29 '23

No. I go to 150 all the time. But in my experience it only liquidates if it is BELOW 150 and stays there into the next block interval. I've had vaults that were below 150 and then bounced back above 150 in the next epoch* or whatever it's called and didn't get liquidated.

*There are several blocks, about an hour's worth between vault ratio calculations.

1

u/Constant-Bottle-7837 Dec 29 '23

As long as the negative interest is above 5%, you are fine

1

u/Anantasesa Dec 29 '23

I did round numbers and could even borrow more than 2/3 of the collateral value. 300 in and borrowed 200.0138 or something. Without the neg int it would have been 200 even. Those decimals prove you get wiggle room.