StudyDeFi

Introducing Dedge

April 03, 2020

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Dedge is a new DApp created by the StudyDefi team that allows you to swap both collateral and debt via Compound. It does this by leveraging flash loans from Aave, token liquidity from Uniswap, and of course loan positions from Compound.

What can Dedge do?

Dedge gives you the ability to instantly swap your collateral or debt between different crypto assets. This is a game-changer, because this means you can not only “save” your position when the market is crashing, but you can also “profit” from it as well.

How? Read on.

When times are bad

Suppose the price of ETH is tanking (just like during Black Thursday) and you are worried about being liquidated because the value of your collateral is dropping very fast.

No problem, all you need to do is log on to Dedge and convert your collateral from ETH to DAI. You’ve just converted your rapidly dropping volatile crypto collateral into a stablecoin collateral.

By converting your collateral to a stablecoin, you’ve effectively frozen your position from the risk of liquidation.

But here’s where it gets better. You can also swap debt.

If the entire crypto market is crashing, you can actually gain from this by changing your debt from a stablecoin to a volatile crypto. This means the value of what you owe will actually go down with the market.

Imagine not only being protected from liquidation, but also getting rid of your debt during a Black Thursday-like event. This gives traders the ability to gain during both good times and the bad times.

In summary, during a bear market, you can swap your debt into a volatile token and swap your collateral into a stablecoin. And of course, you can do the opposite in a bull market.

Using Dedge

Due to limitations in the Compound protocol (i.e. inability to transfer debt or delegate management for positions), we cannot migrate existing Compound positions. However, we can import/convert a Maker Vault position into a Compound position, and it is our recommended way of getting started with Dedge:

  1. Create a Vault on Oasis with MakerDAO
  2. Create a Smart Wallet on Dedge
  3. Import that Vault into Dedge
  4. Start swapping your debt/collateral

FAQ

Do you have access to my funds?

No, the Smart Wallet has access to your funds, which is actually a proxy smart contract that you create. And because you’re the creator of the Smart Wallet, only you have access to your funds (unless you give someone else access).

Do you have an Instagram page?

Yes, we have a cat

How can I import a Maker Vault?

  1. Create a Vault on Oasis with MakerDAO.
  2. Create a Smart Wallet on Dedge.
  3. Import that Vault into Dedge.
  4. Start swapping your debt/collateral.

How can I borrow/repay debt or withdraw/supply collateral?

  1. Create a Smart Wallet on Dedge (if you haven’t already),
  2. Click on the ”…” button on the options column for the specific coin you’re interested in.

What is the smart wallet for?

The Smart Wallet allows us to perform atomic transactions on your behalf. For example, taking out a loan and repaying your debt. This would normally be a manual process, but we since we are using flash loans, it needs to all be in one single transaction. It also saves you time!

Swapping Debt

Swapping Collateral


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