DAI daddy is an autonomous, open-source platform for buying and selling Maker CDPs.
14% of Maker CDPs to date have been forcibly liquidated. When this happens, the ETH held as collateral in the CDP is automatically sold at a 3% discount to pay off the CDP holder's DAI debt, and on top of this a 13% liquidation penalty is applied.
When ETH prices drop, many CDP holders can't afford to top up their CDP with ETH to prevent liquidation; but often, they don’t have enough cash to buy DAI close their CDP. So even though they may still be collateralised at over 150% (i.e. they have sufficient assets to pay back their debt), there is no way to effectively close their CDP and pay back the debt.
How can we allow these users to close their CDP without paying a hefty liquidation fee? Introducing... $dai daddy - an autonomous platform for buying and selling Maker CDPs. Sellers can list their CDP for sale and offer a "discount rate" - less than the 13% fee they would have to pay if forcibly liquidated - which incentivises buyers to provide capital upfront and buy out the seller's debt.
Our smart contract manages the sale and purchase process, taking ownership of the CDP and custody of the funds, and settling the agreement between the parties in a single transaction.
- 🇿🇦 Chris Maree - Smart Contracts + Integrations
- 🇳🇿 Hamed Ali - Front-End
- 🇳🇿 Stefan Bachmann - Front-End
- 🇳🇿 Matthias Bachmann - UX/UI, Design
- 🇳🇿 Liesl Eichholz - UX/UI, Design
DAI daddy works by transferring the ownership of a MakerDao CDP to the DaiDaddy contract which holds the CDP in escrow until someone buys it. At that point the CDP is transferred to the buyer and the funds for the purchase are sent to the seller.
The value of the CDP is calculated by looking at the underlying collateral and debt associated with the CDP. These values can be found by querying the MakerDao Single Collateral Dai(SAI) tub contract which acts as the SAI CDP engine. From tub values associated with a cup (an instance of a CDP) can be extracted as follows:
struct Cup {
address lad; // CDP owner
uint256 ink; // Locked collateral (in SKR)
uint256 art; // Outstanding normalised debt (tax only)
uint256 ire; // Outstanding normalised debt
}
Using these values the total value of the CDP can be found by finding the difference between the underlying collateral and debt. DAI daddy enables you to sell your debt at a discount, which is also considered in this equation as shown below in the debtPrice function.
function debtPrice(uint _art, uint _ire, uint _discount) public pure returns(uint) {
return _art * (_ire/10 - 10 ** 18) * (100 - _discount) / 10 ** 20;
}
This function returns value of the CDP in atto (10^-18 fractions of a USD, as defined by a Dai being 1*10^18 atto).
To find the value of the CDP in Ether the MakerDao price oracle is used via the Medianzer. This price is then used to find quantify the value of the CDP in ETH as.
DAI daddy consists of one main smart contract: DaiDaddy.sol which stores all buisness logic and acts as the escrow for the CDP's during the transfer. This contract imports instances of the MakerDao SaiTub.sol and Medianizer.sol to get information on CDPs and current ether price.
The provided migrations script deploys into a local test enviroment. All contracts have also been deployed to the kovan test net and can be found here: 0x130fa137765A189E2132C2AB06F8E2617414b424
Everything can be set up using one command within yarn.
yarn install
Tests are written in javascript for the solidity tests.
truffle test
To run locally use:
truffle migrate --network development --reset
yarn serve
To deploy to Kovan set up a mnomonic.js in the root of the directory with the following structure:
module.exports = 'saddle ... YOUR SEE HERE ... pool';
Then migrate to Kovan using:
truffle migrate --network kovan --reset