Skip to main content

Open a trove

A trove is your loan against a single collateral type. You lock collateral into the trove, mint RD against it, and pay interest while it's open. You can adjust, repay, or close it at any time.

Before you start​

You need three things:

  1. The collateral. Each branch accepts exactly one ERC-20: WETH, wstETH, rETH, WBTC, etc. Native ETH must be wrapped first.
  2. Enough of it. Every trove must have at least 2,000 RD total debt at the time it's opened. 1,800 of that is net debt that's yours to use; 200 is the gas compensation reserve held by the protocol and refunded if you close cleanly (it's paid out to the liquidator if you don't).
  3. A collateral ratio above the branch MCR. Branch MCR is typically 110%, but is a per-branch parameter, check the live value for the branch you're opening on. At 110% MCR, for every $1.10 of collateral you can mint up to $1.00 of RD net debt.

Pick a branch, pick base or shielded​

You open into exactly one branch. Each branch has its own MCR, oracle, Stability Pool, and borrow rate.

You also choose base or shielded when you open:

  • Base is the default. Lower borrow rate. Your trove is in the redemption queue.
  • Shielded opts your trove out of the unshielded redemption book. Higher borrow rate (the shield premium). See The shield for the trade-off.

You can toggle shield later via shieldTrove / unShieldTrove (or via adjustTrove).

The call​

The entry point is BorrowerOperations.openTrove(...) on the branch you're opening into:

openTrove(
    uint256 _collateralToAdd,    // collateral deposited (in token units)
    uint256 _RDAmount,           // net debt minted (1,800 RD floor)
    address _upperHint,          // hint, see below
    address _lowerHint,          // hint, see below
    bool    _redemptionShield    // true = open as shielded
)

Hints come from the front end or GlobalHintHelper. They're advisory: getting them wrong costs gas, not correctness.

You must approve the branch's BorrowerOperations to pull _collateralToAdd of the collateral token first.

What the protocol does on open​

  1. Pulls _collateralToAdd collateral into the branch's ActivePool (or ActiveShieldedPool if you opened shielded).
  2. Mints _RDAmount RD to you (the "net debt"), plus mints 200 RD to the gas pool (the gas-compensation reserve).
  3. Registers your trove on the branch.
  4. Records your shield flag, if you opened shielded.

If the result would put your ICR below MCR, or would push branch TCR below CCR (recovery mode), the call reverts.

What you pay​

  • Borrow interest, continuously, at the branch's current borrow rate. The rate moves with branch utilization and the controller. See Borrow rates.
  • The shield premium, if you opened shielded. Added on top of the borrow rate.
  • No one-time issuance fee. Unlike Liquity v1, there's no upfront fee on borrowing. Fees accrue continuously instead.

What you should check after​

  • ICR: must stay above MCR. Aim for healthy buffer; collateral price can move.
  • Redemption-queue position: at low ICR, you're at the top of the redemption queue. If you don't want that, either shield or top up collateral.
  • Branch TCR: if branch TCR is near CCR, your borrow may have triggered or be near triggering recovery-mode rules. See Liquidations & Recovery Mode.

Recovery mode opens​

If branch TCR is below CCR when you call openTrove, recovery-mode rules apply:

  • Your new ICR must be at or above CCR (not just MCR).
  • You can't trigger a TCR drop with the opening.

This makes opens harder when the branch is stressed. Repaying existing troves and waiting for TCR to recover is the usual workaround.

Next​