I have 10 Ethereum and I read one can take a loan against it and use it as collateral using the MakerDAO service to get DAI tokens. I've never done this and want to make sure I'm doing it correctly.

My ETH is currently worth pretty much $1000 now. I want to take a loan out for $500.

  • What is my liquidation price where I lose all my ETH?
  • What is the interest rate on borrowing?
  • Does my interest rate change after borrowing for 1 year?
  • Do I have to make monthly payments?
  • What else does one need to know before doing this? Any gotchas I should be aware of?

Try using this CDP calculator :) https://cdp-simulator.surge.sh/

That'll put you at a 200% Collateralization Ratio, and your Liquidation price to about $81 dollars.

You don't lose ALL your ETH. You lose the amount of ETH required to cover your debt+ a liquidation penalty (currently 13%).

The current interest rate is 0.5% APY. It's a variable rate that votes based on no predefined time-schedule. MKR voters vote on this parameter when it needs to be adjusted based on Dai supply and demand.

No terms, no monthly payments.

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