> For the complete documentation index, see [llms.txt](https://docs.virtue.money/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.virtue.money/mechanisms/cdp-collateralized-debt-position.md).

# CDP(Collateralized Debt Position)

To mint $VUSD, users must open a CDP by depositing supported collateral (e.g., $IOTA and $stIOTA) into the protocol.

**Here’s how it works:**

1. Deposit Collateral\
   Choose a supported token and lock it in a CDP.
2. Mint $VUSD\
   Based on your collateral value and the required Minimum Collateral Ratio (MCR), you can borrow $VUSD.
3. Manage Your Position\
   You can repay your debt anytime to withdraw collateral. If your CDP falls below the MCR, it becomes eligible for liquidation.<br>

**Key parameters:**

* Collateral Ratio (CR) = (Collateral Value / Debt Value) × 100%
* To avoid liquidation, keep your CR above the MCR at all times.

Virtue’s CDP system is designed to be efficient, transparent, and predictable — with fixed fees and real-time updates.