Opening A Trove
Opening a trove is kind of like opening a bank account and taking out a loan. But instead of a bank, this is DeFi, and the “loan” is you borrowing from yourself… with no interest.
Still confused? Let’s say you have 100 $ETH, and the current price of $ETH is $1,000. That means the current value of all your $ETH is $100,000. Great!
Now let’s say that you hear of an awesome new project, and you want to buy some of their tokens because you think it’s going to the moon 🌕 but you don’t have any extra money to put into crypto, and you certainly don’t want to sell your beloved $ETH. So what do you do?
You open a Trove in Meridian Finance 😏👍
By opening a trove you can deposit your $ETH in the platform and receive USDM for depositing your $ETH. Don’t worry your $ETH is not going ANYWHERE, it’s just being locked up, and you can retrieve it at any time, all you have to do is pay back the USDM you borrowed, and your $ETH is unlocked, and in your wallet again.
So what can you do with your newly received USDM? You can go ahead a use that USDM for anything you want, like buying into that new project that you know is going to the moon 🚀
How to open a Trove
The first thing you do is go to “Launch Meridian Mint”
Connect
Make sure you are on the desired network
Then open a Trove!
Note When opening a trove there are a couple of things you need to keep in mind.
1. Your Trove must be opened with AT LEAST a value of $200 meaning that for our example we will need to deposit at least 2,000 $TLOS
2. The second thing to keep in mind is that whenever you open a trove, the platform will automatically set aside a $20 USDM deposit. This means that if you open a trove of 2,000 $TLOS you will receive $180 USDM. When you close your trove, you will receive that amount back to you.
3. Under normal circumstances the minimum collateral ratio must be 110%. This means you will never be able to take out the full current value amount of your TLOS (This is done to make sure that the USDM you receive is backed properly)
4. There is a Borrow fee of 0.05% This amount is deducted from the borrowed amount as a one-time fee. There are no recurring fees for borrowing, which is thus interest-free.
(The 10,000 TLOS does not represent accurate numbers, it is soley used as a visual aid)
You now should have USDM in your wallet to use however you want 💰💰💰🤑