Collateralized Debt Position Creator

WHAT IT DOES

This tool enables you to create Collateralized Debt Positions (CDPs) across leading DeFi protocols—MakerDAO, Liquity, Compound, and Aave—by depositing collateral and borrowing debt tokens in a single workflow. It reads your wallet balances and token approvals, fetches current market prices, collateral ratios, stability fees, and liquidation parameters from protocol contracts and price oracles. You specify collateral amount (e.g., 1.5 ETH), debt amount (e.g., 1000 DAI), and protocol selection. The tool simulates the CDP creation, calculates health factor, liquidation price, and risk metrics, then submits the transaction to create the position. Users pay gas for each transaction.

HOW TO USE

Connect your EVM wallet using the "Connect" button. Select the protocol (MakerDAO, Liquity, Compound, or Aave) and network (Ethereum, Polygon, Arbitrum, Optimism, Avalanche, BSC, Fantom, or Gnosis). Enter the collateral amount (in native token, e.g., ETH) and debt amount (in stablecoin, e.g., DAI). Click "Preview CDP creation" to simulate the position and review health factor, liquidation price, collateral value, stability fee, and estimated gas. The preview will warn you if the health factor is below 1.2, indicating elevated liquidation risk. Review all details, then click "Create CDP" to submit the transaction. A progress bar will show approval, deposit, and borrowing steps. Once confirmed, your CDP is active and you'll receive a transaction hash for verification.

TECHNICAL MECHANISM

The tool uses a multi-step simulation before transaction submission. It reads user balances via the provider to confirm sufficient collateral. It fetches current market prices from price oracles (Chainlink, Uniswap) and protocol parameters (liquidation ratio, stability fee, debt ceilings) from contract calls or APIs. The health factor is calculated as: (collateral × price) / (debt × liquidationRatio). Liquidation price is computed as: (debt × liquidationRatio) / collateral. The tool then constructs protocol-specific transaction data: for MakerDAO, it uses join/exit/frob on the Vat contract; for Liquity, openTrove on TroveManager; for Compound, mint on cToken contracts; for Aave, deposit and borrow on LendingPool. The tool checks token approvals and triggers approval transactions if needed before submitting the main CDP creation transaction. All transactions are submitted sequentially and awaited with progress feedback.

WHAT IT CANNOT SEE

The tool cannot guarantee successful CDP creation due to gas fluctuations, oracle price volatility, or protocol-specific constraints such as minimum collateral ratios, debt ceilings, or temporary protocol pauses. It cannot execute cross-chain CDP creation—each chain requires separate transactions, so you must switch networks and run the tool again for each chain. It cannot recover funds if sent to incompatible contracts or if you enter an incorrect token address. It cannot verify that you have sufficient collateral or that the debt amount is within protocol limits without simulation—it relies on on-chain data and may be affected by latency. It cannot detect off-chain holdings (e.g., centralized exchange balances, fiat currency) or assets in wallets you do not specify. It does not provide financial advice or guarantee the accuracy of simulation data—always verify position parameters directly on-chain.

PLEASE NOTE

This tool is for informational and transaction execution purposes only and is not financial advice. CDP creation involves risk of liquidation if collateral value drops or debt increases. Health factors and liquidation prices are estimates based on live data and may change between preview and execution. Always verify your position and risk exposure directly on-chain before confirming any transaction. The tool's data sources are subject to rate limits and availability. This tool only works with EVM-compatible chains and the supported protocols. Use at your own risk.