What is a Collateralized Debt Position?

The Collateralized Debt Position (CDP) allows a DeFi user to lock their crypto assets (currently only ETH) into the CDP vault and receive a loan against the deposited sum of 66 percent DAI (1 DAI = 1 USD). The user only needs to repay their borrowed debt in Dai in order to unlock and reclaim their locked crypto assets.

Example:

• Lock up 100ETH in the collateral vault

• Borrow up to 66ETH worth of Dai

• Repay borrowed Dai at any point in the future to unlock and reclaim collateral

The problem users are faced with in the current scenario is that 100 ETH is required to receive a loan worth 66 ETH in value. Bird.Money is looking to change that requirement.

What about users without access to 100ETH with payment history and need 66ETH?

We can increase access to funds for borrowers with market intelligence and payment analysis through Bird.Money analytics in a scheme called Bird+

Bird+ is the additional amount of tokens offered to borrowers without any additional collateral, which is based on their transaction history and rating from Bird.Money analytics.

Example of transaction history and amount of Bird tokens available to borrowers: