How to Liquidate Account(s) and Redeem UND on the Unbound V2 Testnet
In this guide, we will demonstrate how to liquidate Account(s) and Redeem UND on the Unbound v2 testnet.
Unbound v2 has introduced Price Stability Mechanisms i.e. Liquidation and Redemption to maintain UND’s peg with USD. Follow the guide to know more about how to utilise the functions.
How to liquidate an account?
In Unbound v2, Smart accounts whose collateralization ratio (CR) drops below the minimum collateralization ratio (MCR) of the vault become eligible for liquidation.
- Click on ‘Liquidation’
2. You will now be able to see a list of all the Smart accounts arranged in ascending order of their CR value. Accounts with an active “Liquidate” tab are the ones eligible for liquidation.
3. If you don’t find any active “Liquidate” tabs and still want to try the functionality, you can adjust the collateral price to bring down the CR values.
Click on the ‘Set Pricing’ button for reducing the LP price so that liquidation can be triggered.
Note: This feature has only been retained for the testnet version of the product to enable users to try on liquidation.
4. Next, set a collateral price value lower than the current price and click on ‘Set Price’ to continue.
5. ‘Confirm’ the transaction in your wallet
6. Those accounts with CR<MCR are now eligible for liquidation. To liquidate the account click on ‘Liquidate’.
7. ‘Confirm’ the transaction in your wallet.
8. The amount of collateral corresponding to the liquidated account has been transferred to your wallet by the Unbound smart contracts.
How to Liquidate Multiple Accounts?
Users can also liquidate multiple accounts at once by entering the no. of account in the ‘Accounts to liquidate’ box.
- Enter the no. of accounts you want to liquidate and click on ‘Liquidate’.
2. Complete the transaction by clicking on ‘Confirm’.
How to redeem UND?
At Unbound v2 you can redeem UND at face value and in return gain collateral equivalent to the amount of UND redeemed.
- Tap on ‘Redeem UND’
2. Enter the amount of UND you want to redeem and click on ‘Redeem UND’.
3. ‘Confirm’ the transaction in your wallet.
You have now successfully redeemed UND.
The guides to ‘Creating a Smart Account’, ‘Borrowing and Repaying UND’ and ‘Depositing and Withdrawing Collateral’ can be accessed through the links below:
How to Create a Smart Account, Borrow and Repay UND: https://unboundfinance.medium.com/how-to-create-a-smart-account-borrow-and-repay-und-on-the-unbound-v2-testnet-514287c91371
How to Deposit and Withdraw Collateral: https://unboundfinance.medium.com/how-to-deposit-and-withdraw-collateral-on-the-unbound-v2-testnet-c845ddb80699?postPublishedType=initial
About Unbound Finance
Unbound Finance is a novel, non-custodial lending platform, driven towards enabling newer and better opportunities of yield with a view to improving the overall capital efficiency of the DeFi ecosystem. The platform enables DeFi users to borrow over-collateralized synthetic asset loans in the form of UND stablecoin by collateralizing liquidity pool tokens (LP tokens) and concentrated liquidity positions of next-gen AMMs such as Uniswap v3.
Through synthetic assets like UND stablecoin, Unbound aims to unlock the liquidity available in DeFi DEXs and to enable the easy flow of this liquidity from one chain to another without actually removing it.
The key highlights of the protocol are as follows:
- Interest-free borrowing: Unbound does not charge any interest on the borrowed UND.
- Perpetual borrowing: At Unbound, borrowers have unlimited maturities. Users can unlock the underlying collateral at any time by simply paying off the outstanding debt.
- Stablecoin UND: UND is the first flagship product of the Unbound protocol. It is a decentralized, cross-chain stablecoin designed to be native to the AMM space.
- Factory Smart Contracts: Unbound makes use of liquidity lock contracts that are permissionless and support EVM-based AMMs like Uniswap, Balancer, Curve, SushiSwap and the like.
- Collateralizing concentrated liquidity positions: Unbound is one of the first protocols that allows concentrated liquidity positions to be used as collateral for borrowing synthetic crypto assets such as UND stablecoin.