CDP (collateralised debt position)
CDP
A user-opened debt position backed by crypto collateral — the issuance mechanism for DAI, LUSD, GHO, crvUSD.
CDPs let users mint stablecoin debt against deposited collateral, with Liquidation triggered if the collateral ratio falls below threshold. Distinct from pool-based Lending markets in that each CDP is user-owned and isolated.
Related terms
- DAIThe pioneering decentralised stablecoin, issued by MakerDAO via [[cdp]] vaults backed by ETH, RWA, and other collateral.
- LUSDLiquity's minimally-governed CDP stablecoin, ETH-collateralised, with a 110% min ratio and a stability-pool liquidation mechanism.
- Over-collateralisationBacking debt with collateral worth more than the debt itself — the standard for permissionless CDP stablecoins.
- LiquidationForced sale of collateral when a borrower's health factor falls below the protocol's threshold.