Update: Backd mainnet is live. Try it out at https://backd.fund/.
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Due to the volatility of cryptocurrencies, we often have to over-collateralise when taking out a loan on lending protocols like Aave and Venus to prevent liquidation. Backd is a project that allows you to put that collateral to work, farming yield while protecting your loan from liquidation.
Assets deposited to Backd earns yields on farms and serves as backup asset at the same time. When your loan is in danger of liquidation due to market fluctuations, the platform’s “Keeper” will automatically withdraw funds from your backup assets to cover the loan position, therefore preventing liquidation. In this way, users do not have to sacrifice capital efficiency (by over-collateralising) to secure their borrowing positions.
They have launched their testnet and are inviting users to try it out.
The developers of Backd have indicated the possibility of an airdrop to testnet users but nothing has been confirmed yet. So consider yourself whether you want to spend time on the testnet.
Follow the steps below to go through the core functions of the protocol.
First switch the network of your wallet to “Kovan Test Network”.
Then grab some Kovan testnet $ETH at their discord server. Go to “kovan-facuet” and input your address. The bot will react with a 👍 when the $ETH has been sent to your wallet.
Now you have $ETH in your wallet, go to Aave facuet and change the market to “Aave V2”.
Click “MORE” and choose “Faucet”.
Get some $DAI from the Faucet.
We take out a loan on Aave. First, we need to deposit $DAI.
Then go to “BORROW” and borrow $ETH. Take note of your health factor to be used later.
We deposit our backup asset. Go to https://backd.fund/ and click “View Pools”.
Choose the DAI pool.
Deposit your desired amount of $DAI.
Now we allow our backup asset to top-up our collateral on Aave when in danger of liquidation.
Go to “Top-Up Positions” and input your parameters.
Protocol: Borrowing on Aave
Address: Your wallet address (or the wallet address that the loan is on)
Threshold: The health factor at which a top-up should occur (The threshold should be lower than the health factor you see when you take out the loan at Aave.)
Single top-up: (denominated in the deposited asset) the amount of your assets to be deposited into your collateral if a top-up occurs
Max top-up: The total value of your Backd assets allocated to top-ups
Confirm your top-up position.
We close our top-up position by clicking the red garbage can.
Finally, we withdraw our deposited assets.
Those are the core functions and we have tested them all. If you see any bugs, you can report to the Backd team at their discord channel.
Click “MORE” and choose “Faucet”. unable to perform this action
difficult to do this step :Go to “Top-Up Positions” and input your parameters.but finally success