How to survive the bear market without selling your crypto

TL;DR: How to gain some cash without spending your crypto

Requirements:

• Any crypto (ideally ETH)
• Metamask, Trezor or Nano Ledger wallet
• WireX debit card (which supports ETH wallet)

Now it is a hard time for all crypto holders; crypto is low, and it is not a good idea to sell it.

The goal of this article is to describe how thanks to CDP (Collateralized Debt Position), it is possible to mint the new DAI stable-coins and consequently change them to fiat.

It is quite likely this is not an optimal solution (and will be changed over time), so I would appreciate any hints & comments to improve it.

1. Change your crypto to ETHs (what is necessary for the CDP collateral)
   • Use Changelly / Shapeshift. If you want to avoid AML/KYC, use decentralized Waves DEX or Bisq. Waves DEX has better liquidity than bisq and has reasonable conversion rates.
2. Create your new shiny CDP
   • There is a new beautiful, user-friendly CDP portal where you can easily create the CDP contract.
   • It supports Metamask, Ledger S and Trezor (I’ve tested Metamask and Trezor, and it works nicely – you probably have to allow Trezor pop-ups and use “MyCrypto” in Trezor).
   • Set the Collateralization “safe” ratio above 150% – I recommend at least 200% (e.g., I have used the collateral of 4 ETHs and asked for 200 DAIs which is 248%).
   • Check the Liquidation price of ETH/USD – your CDP contract will be automatically liquidated when ETH falls to the given value. To prevent this unpleasant situation, you have to increase the whole collateral of CDP (top up with ETHs) or send back some DAIs. Below you’ll find the simple script you can use to check the “healthy status” of your CDP.
   • Note that the annual fee for the CDP is 2.5% (which is still pretty low, especially if you want to close the CDP in the following months – when we reach the moon 🙂
3. Change your new minted DAIs to ETHs using Oasis DEX
   • Click “Buy W-ETH” and as a price use the recent one from “Buy orders”. Define the number of DAIs you want to change to W-ETHs. After this operation is complete, you need to unwrap W-ETHs back to ETHs.
4. Top up your crypto debit card
   • Open your WireX application, choose your ETH wallet and activate the ETH address. Send all your ETHs from step 3 to your new WireX ETH address
   • Enjoy your new created money 🙂
   • WireX charges you 2.25 EUR for cash ATM pick up, so probably the better idea is to use WireX to top up your Revolut card. POS payments using WireX should be for free.

And now my experience:

I’ve used 4 ETHs as my CDP collateral and minted new 200 DAIs. I’ve changed them immediately (using Oasis DEX) to 1.59349 ETH and sent them directly to my WireX card. For my 200 DAIs, I got 169.20 EUR(=193 USD). So the difference is 7 USD what is 3.5%. Not the best fee, but also not so bad.

And now installing the CDP “healthy check” script (made by Juraj Bednár) is quite easy (different OSes may have different prerequisites for the installation of pymaker):

$ git clone https://github.com/makerdao/pymaker
$ cd pymaker/
$ pip3 install -r requirements.txt
$ git clone https://github.com/jooray/check-cdp
$ ln check-cdp/check-cdp.py check-cdp.y
$ python3 check-cdp.py -w 200 4423
CDP #4423
  Owner 0x49C3f67849b03Ccd31e89C0B7C689E3C10aBE31b
  Deposited 3.8646923 PETH
  Debt 200.0 DAI
  Current Ratio 240.30%

The script returns “false” in case the current ratio falls to less than a defined threshold (what is 200% in this situation).

If you like this article, we appreciate your DAI contribution to the address 0xC0e842bA82c16ef9E1c5890A9696fF2FA72BEc07