Creating a Vault

Creating your first vault

To create a vault and mint KEI, navigate to the 'Manage Vault' section in the sidebar. There, you will find a box labeled 'Borrow KEI'. Within this interface, input the amount of collateral you wish to deposit and specify the amount of KEI you intend to borrow. Remember the amount of KEI you can borrow depends on the value of the collateral you deposit

Adding 500 Collateral (worth $3000 dollars) and borrowing 2000 KEI

After inputting your desired values, click the "Approve Token" button to authorize Keiko contracts to access your collateral. Subsequently, you will see a "Select MCR" button. Clicking this button will trigger a popup window.

Keiko offers the unique feature of allowing users to select their preferred Minimum Collateralization Ratio (MCR) for their vault. Your chosen MCR will determine two key factors:

1. The amount of KEI you can borrow: A lower MCR allows for higher borrowing capacity, while a higher MCR restricts the amount you can borrow.

2. The interest rate on your position: The MCR inversely affects the interest rate. A lower MCR results in a higher interest rate, while a higher MCR leads to a lower interest rate.

This flexibility enables you to tailor your vault's risk profile and borrowing costs to your specific needs and risk tolerance.

Remember that your selected MCR always has to be lower than your current vault collateral ratio.

You can move the MCR slider to see how your interest rate changes in real time

Upon successful creation of your vault, you can monitor its status and access detailed information in the 'Vault Overview' section, located on the right side of the screen. This section provides a comprehensive snapshot of your vault's current state.

Congratulations! You have successfully created a vault. The amount of KEI you borrowed has been automatically transferred to your wallet.

It is important to consistently monitor your collateral value to ensure it remains above your selected Minimum Collateralization Ratio (MCR). If the value of your collateral decreases, you have several options to maintain a healthy vault and avoid liquidation:

1. Lower your MCR: Adjusting your MCR downward can provide more buffer against price fluctuations.

2. Repay debt: Reducing your outstanding KEI debt will improve your vault's collateralization ratio.

3. Add collateral: Depositing additional collateral will increase your vault's collateralization ratio.

Regularly reviewing and managing your vault's status is essential for maintaining a stable position and mitigating the risk of liquidation. We recommend checking your vault frequently, especially during periods of market volatility.