CDP (Collateralized Debt Position)

Borrow USDC against WBTC collateral via Nostra lending protocol. Users maintain a health factor above 1.0 to avoid liquidation.

Overview

Sable’s CDP contract enables users to:

Deposit WBTC as collateral
Borrow USDC against collateral (up to 70% LTV)
Monitor health factor in real-time
Repay debt and withdraw collateral anytime
Close position atomically in a single transaction

CDP Parameters

Parameter	Value
Collateral Token	WBTC (8 decimals)
Debt Token	USDC (6 decimals)
Max LTV	70%
Liquidation Threshold	~75% (Nostra parameter)
Backend Protocol	Nostra Finance
Collateral Token (Nostra)	iWBTC-c (`0x05b7...f0c`)
Debt Token (Nostra)	dUSDC (`0x063d...a51`)

CDP Lifecycle

Open Position

Deposit Collateral

User approves WBTC and deposits into CDP contract:

WBTC.approve(CDP_CONTRACT, collateral_amount)
CDP.deposit_collateral(collateral_amount)

The contract:

Transfers WBTC from user
Approves WBTC to Nostra CDP Manager
Deposits as iWBTC-c collateral on Nostra

Borrow USDC

User borrows USDC against deposited collateral:

CDP.borrow(usdc_amount)

The contract:

Borrows USDC from Nostra against iWBTC-c
Transfers USDC to user’s wallet

Max borrow = Collateral Value × 70%. Borrowing more will revert.

Manage Position

Health Factor
Add Collateral
Repay Debt
Withdraw Collateral

Health Factor measures your position’s safety:

Health Factor = (Collateral Value × Liquidation Threshold) / Debt Value

Example:

Collateral: 0.001 WBTC ($100)
Debt: $50 USDC
Liquidation Threshold: 75%

Health Factor = ($100 × 0.75) / $50 = 1.5

Health Factor	Status	Action
> 2.0	Very Safe (green)	Can borrow more
1.5 – 2.0	Safe (green)	Healthy position
1.0 – 1.5	Caution (yellow)	Add collateral or repay
< 1.0	LIQUIDATION RISK (red)	Immediate action required

Increase your health factor by adding more WBTC:

WBTC.approve(CDP_CONTRACT, additional_amount)
CDP.deposit_collateral(additional_amount)

Effect:

Before: 0.001 WBTC collateral, $50 debt → HF = 1.5
Add: 0.001 WBTC
After: 0.002 WBTC collateral, $50 debt → HF = 3.0

Reduce debt to improve health factor:

USDC.approve(CDP_CONTRACT, repay_amount)
CDP.repay(repay_amount)

Effect:

Before: 0.001 WBTC collateral, $50 debt → HF = 1.5
Repay: $20 USDC
After: 0.001 WBTC collateral, $30 debt → HF = 2.5

Withdraw excess collateral (if health factor permits):

CDP.withdraw_collateral(amount)

Withdrawal will revert if it would push health factor below 1.0.

Close Position

Close your CDP atomically in a single transaction:

USDC.approve(CDP_CONTRACT, total_debt)
CDP.close_position()

Calculate Total Debt

Contract calculates total debt including accrued interest:

total_debt = principal + accrued_interest

Repay 100% of Debt

User must approve enough USDC to cover full debt. Contract repays entire debt to Nostra.

Withdraw 100% of Collateral

Contract withdraws all iWBTC-c from Nostra and returns WBTC to user.

close_position() is atomic — no partial state. Either the entire position closes successfully, or the transaction reverts.

Liquidation Price Calculation

Your liquidation price is the BTC price at which health factor drops to 1.0:

Liquidation Price = (Debt USDC × 100) / (Collateral WBTC × Max LTV)

Example:

Collateral: 0.001 WBTC
Debt: $50 USDC
Max LTV: 70%

Liquidation Price = ($50 × 100) / (0.001 × 70) = $71,428

If BTC drops below $71,428, your position can be liquidated.

Liquidation on Nostra involves a penalty (typically 5-10%). Always maintain health factor > 1.5 for safety.

LTV (Loan-to-Value) Calculation

LTV = (Debt Value / Collateral Value) × 100

Example:

Collateral: 0.001 WBTC ($100)
Debt: $50 USDC

LTV = ($50 / $100) × 100 = 50%

LTV Range	Status	Risk Level
0% – 45%	Safe	Low
45% – 60%	Moderate	Medium
60% – 70%	High	High
> 70%	Impossible	Cannot borrow more

CDP Contract Flow

┌──────────┐
│   User   │
│          │
│  (WBTC)  │
└────┬─────┘
     │ deposit_collateral
     ▼
┌──────────────────────┐
│   Sable CDP Contract   │
│                        │
│  deposit ──────────► │
│                        │
│  borrow  ◄────────── │
│                        │
│  repay   ──────────► │
│                        │
│  withdraw◄────────── │
└────────┬─────────────┘
         │
         ▼
┌──────────────────────┐
│  Nostra CDP Manager   │
│                        │
│  iWBTC-c (collateral) │
│  dUSDC (debt)         │
│                        │
│  Health tracking      │
│  Liquidation engine   │
└────────┬─────────────┘
         │
         ▼
┌──────────────────────┐
│  Pragma Oracle       │
│  (BTC/USD price)     │
└──────────────────────┘

Interest Accrual

Debt accrues interest over time based on Nostra’s borrow rate:

Borrow Rate (variable):
  • Depends on USDC pool utilization
  • Typically 3-8% APR
  • Updates continuously

Example:
  Initial debt: $100 USDC
  Borrow rate: 5% APR
  After 30 days: $100.41 USDC debt
  After 1 year: $105.00 USDC debt

Interest is compounded continuously on Nostra. Your debt increases every block.

CDP Contract

Address: 0x042f0f1cbb5ce44cc411f608d3c8295f3816ef7c3b6764cd6e46463efc7ca499 Key Functions:

// Deposit WBTC as collateral
fn deposit_collateral(amount: u256);

// Borrow USDC against collateral
fn borrow(amount: u256);

// Repay USDC debt
fn repay(amount: u256);

// Withdraw collateral (if health permits)
fn withdraw_collateral(amount: u256);

// Close position atomically
fn close_position();

// View functions
fn get_position(user: ContractAddress) -> CdpPosition;
fn get_health_factor(user: ContractAddress) -> u256;
fn get_liquidation_price(user: ContractAddress) -> u256;

Example Position

Open Position
BTC Drops 10%
Add Collateral
Close Position

Step 1: Deposit 0.001 WBTC ($100)
  Collateral: 0.001 WBTC
  Debt: $0
  Health Factor: ∞ (no debt)
  Max Borrow: $70 USDC (70% LTV)

Step 2: Borrow $50 USDC
  Collateral: 0.001 WBTC ($100)
  Debt: $50 USDC
  LTV: 50%
  Health Factor: 1.5
  Liquidation Price: $71,428

BTC price drops from $100,000 to $90,000

Position:
  Collateral: 0.001 WBTC ($90)
  Debt: $50 USDC
  LTV: 55.6%
  Health Factor: 1.35 (caution!)
  Liquidation Price: $71,428

Action: Add collateral or repay debt

Add 0.0005 WBTC ($45)

Position:
  Collateral: 0.0015 WBTC ($135)
  Debt: $50 USDC
  LTV: 37%
  Health Factor: 2.03 (safe!)
  Liquidation Price: $47,619

Repay full debt and withdraw all collateral

Before:
  Collateral: 0.0015 WBTC ($135)
  Debt: $50.12 USDC (incl. interest)

After:
  Collateral: 0 WBTC
  Debt: $0
  Received: 0.0015 WBTC
  Spent: $50.12 USDC

Use Cases

Leverage Long BTC

Borrow USDC, buy more BTC. Amplify BTC exposure without selling.Risk: BTC price drop can trigger liquidation.

Unlock Liquidity

Access USDC without selling BTC. Keep your BTC exposure.Risk: Interest accrues on borrowed USDC.

Yield Farming

Borrow USDC at low rate, deploy to higher-yield strategies (Vesu, Sentinel vault).Risk: Yield may not cover borrow rate + gas.

Arb Opportunities

Borrow USDC to capture arbitrage opportunities on DEXes.Risk: Arb window may close before execution.

Safety Best Practices

Critical: Always maintain health factor > 1.5 for safety margin against:

Sudden BTC price drops
Oracle price updates
Network congestion (can’t repay in time)

Tips

Start Conservative: Borrow max 50% LTV initially
Set Price Alerts: Monitor BTC price near liquidation level
Keep USDC Reserve: Have extra USDC for emergency repayment
Monitor Interest: Debt grows continuously — check regularly
Use Stop Loss: Close position if BTC drops > 10%

Risk Factors

Liquidation risk: BTC volatility can trigger liquidation
BTC price volatility: 10-20% daily swings are common
Smart contract risk: Sable CDP + Nostra protocol risks
Oracle risk: Pragma oracle manipulation or outage
Interest rate changes: Borrow rate can spike during high utilization
Network congestion: High gas fees may prevent timely repayment

Next Steps

Open Your First CDP

Step-by-step guide to borrowing USDC

Calculate Liquidation Price

Tools and formulas for risk management

CDP Contract Reference

Technical documentation and ABIs

Nostra Integration

How Sable integrates with Nostra

Get Started

Features

Protocol Integrations

CDP (Collateralized Debt Position)

CDP (Collateralized Debt Position)

Overview

CDP Parameters

CDP Lifecycle

Open Position

Manage Position

Close Position

Liquidation Price Calculation

LTV (Loan-to-Value) Calculation

CDP Contract Flow

Interest Accrual

CDP Contract

Example Position

Use Cases

Leverage Long BTC

Unlock Liquidity

Yield Farming

Arb Opportunities

Safety Best Practices

Tips

Risk Factors

Next Steps

Open Your First CDP

Calculate Liquidation Price

CDP Contract Reference

Nostra Integration

Get Started

Features

Protocol Integrations

Documentation Index

​CDP (Collateralized Debt Position)

​Overview

​CDP Parameters

​CDP Lifecycle

​Open Position

​Manage Position

​Close Position

​Liquidation Price Calculation

​LTV (Loan-to-Value) Calculation

​CDP Contract Flow

​Interest Accrual

​CDP Contract

​Example Position

​Use Cases

Leverage Long BTC

Unlock Liquidity

Yield Farming

Arb Opportunities

​Safety Best Practices

​Tips

​Risk Factors

​Next Steps

Open Your First CDP

Calculate Liquidation Price

CDP Contract Reference

Nostra Integration

CDP (Collateralized Debt Position)

Overview

CDP Parameters

CDP Lifecycle

Open Position

Manage Position

Close Position

Liquidation Price Calculation

LTV (Loan-to-Value) Calculation

CDP Contract Flow

Interest Accrual

CDP Contract

Example Position

Use Cases

Safety Best Practices

Tips

Risk Factors

Next Steps