So you’re ready to collateralize your PLS holdings and mint USDL.
Use our Step-By-Step Guide to make sure you are borrowing USDL correctly.
Note: This guide is for PulseChain Testnet v4 ONLY. Once Liquid Loans exists on PulseChain Mainnet, the guide will be updated.
In order to borrow USDL, you need PLS to lock in a vault as collateral.
If you need help, use our guide on How To Buy PLS.
The link for the dApp is here: https://testnet.liquidloans.io/#/
Once you’ve signed into your wallet, click “Connect Wallet” in the top right corner of the dApp.
Choose Metamask Wallet or Other.
Choose “Borrow USDL” from the left hand sidebar.
Choose the amount of PLS you want to collateralize and the amount of USDL you want to borrow.
We chose a 250% collateral ratio for safety.
Once the transaction is validated you have officially borrowed USDL!
There are many things you can do with your newly minted USDL:
Opting to borrow USDL entails the potential drawback of jeopardizing your PLS holdings through a liquidation.
Even though your USDL remains intact, a liquidation would incur an immediate loss of up to 10%.
While liquidations have specific scenarios where they might be desirable (i.ie. stop loss during big market correction), most individuals will opt to avoid it.
As a prudent measure, it's advisable to establish a robust collateral ratio, such as 250%.
If you opt for a collateral ratio lower than that, it's essential to stay vigilant regarding downward price volatility of PLS.
Should you observe your collateral level nearing the 110% mark, it is smart to promptly repay your loan to avert the risk of liquidation.
In summary, borrowers should carefully manage their collateral ratios to mitigate the potential impact of liquidation, safeguarding their holdings and financial well-being.
Join The Leading Crypto ChannelJOIN
Disclaimer:Please note that nothing on this website constitutes financial advice. Whilst every effort has been made to ensure that the information provided on this website is accurate, individuals must not rely on this information to make a financial or investment decision. Before making any decision, we strongly recommend you consult a qualified professional who should take into account your specific investment objectives, financial situation and individual needs.
Connor is a US-based digital marketer and writer. He has a diverse military and academic background, but developed a passion over the years for blockchain and DeFi because of their potential to provide censorship resistance and financial freedom. Connor is dedicated to educating and inspiring others in the space, and is an active member and investor in the Ethereum, Hex, and PulseChain communities.