DAI
Governed by the MakerDAO and Maker Protocol
What Is a Collateralized Debt Position (CDP)?
A collateralized debt position (CDP) is the position created by locking collateral in MakerDAO’s smart contract to generate its decentralized stablecoin, DAI.This system was introduced to the decentralized finance world by the MakerDAO team and is how its decentralized stablecoin DAI is created.
The value of the collateral locked in a CDP needs always to exceed 150% of the value of DAI that it was used to generate. If a position becomes undercollateralized, the assets locked in the smart contract get sold to pay back for the DAI generated, a 13% liquidation penalty and the stability fees (currently at 8.5% per year.)
Collateralized Debt Position (CDP) Definition | CoinMarketCap