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Tim's changes 11-17 #46

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Tim's changes 11-17 #46

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19 changes: 11 additions & 8 deletions docs/faq.md
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Expand Up @@ -57,14 +57,17 @@ Yes, you can add more collateral to your vault at any time. Depending on your co
Each type of vault has its own collateralization ratio that is required. The “collateralization ratio” is the ratio of the value of the collateral deposited in your vault to the value of the OD borrowed against it. When borrowing OD be sure to leave a margin that accounts for market volatility and top up your vault with more collateral as needed.

### Where can I use my OD tokens?
OD is a standard ERC-20 token which can be used accross any bridge, DeFi protocols, exchanges, etc. that support it. Have an idea for an OD integration? Let us know in [discord](https://discord.opendollar.com/)!
OD is a standard ERC-20 token which can be used across any bridge, DeFi protocols, exchanges, etc. that support it. Have an idea for an OD integration? Let us know in [Discord](https://discord.opendollar.com/)!

### What networks is Open Dollar deployed on?
Open Dollar is currently only deployed on Arbitrum. There's also a testnet version deployed on Arbtrium-Goerli.
Open Dollar is currently only deployed on Arbitrum. There's also a testnet version deployed on Arbtrium-Sepolia.

### Where can I trade my NFV?
You can trade your vaults on any NFT marketplace, like [OpenSea](https://opensea.io/) for example. Keep in mind that when you sell your Non-Fungible Vault you’re also selling all collateral and debt associated with it. Any app or tool which supports the ERC-721 token standard will also support Open Dollar NFVs.

### How do I update my NFV image metadata?
If you’ve altered your vault on the OD Protocol, changes reflect in the Open Dollar vault dashboard immediately. On NFT marketplaces the vault image and data in the description may be cached and require refreshing of the metadata to view the most current data. On OpenSea, look in the top right of the screen, click the 3 horizontal dots ( … ) directly underneath the “List for sale” button, & select “Refresh metadata”.

### Is OD a rebase token that changes my balance over time?

No. The protocol doesn't change the amount of tokens you have. Rather, it changes the target price that the protocol wants OD to have on exchanges. This makes it easier to use OD throughout DeFi.
Expand Down Expand Up @@ -99,25 +102,25 @@ A system like OD has two types of rates:

* Capped borrow rate: in the long run, OD will have a capped (and small) borrow rate which makes the cost of maintaining a vault more predictable. Governance can, in theory, set the borrow rate to 0% although this prevents the system from accruing surplus that's used to incentivize to update core components such as oracles and the PID.

* Insurance for vaults: in the long run we can allow Vault users to attach a wide variety of insurance contracts meant to protect their positions against liquidation
* Insurance for vaults: in the long run we can allow vault users to attach a wide variety of insurance contracts meant to protect their positions against liquidation

* No exposure to assets with counterparty risk: OD will only be backed by ETH. Borrowers are not exposed to riskier crypto assets or real world collateral

* Superior collateral factors: as we improve the efficiency of our [collateral auctions](/system-contracts/auction-module/fixed-discount-collateral-auction-house) and add insurance contracts for Vaults, we can lower the collateral requirements for borrowing OD
* Superior collateral factors: as we improve the efficiency of our [collateral auctions](/system-contracts/auction-module/fixed-discount-collateral-auction-house) and add insurance contracts for vaults, we can lower the collateral requirements for borrowing OD

### How does the OD price work/behave?

The long term price trajectory of OD is determined by the demand for leverage on the types of tokens Open Dollar allows as collateral. OD tends to appreciate if vault users deleverage and/or OD users long and it depreciates in case vault users leverage and/or OD users short.

To better understand how OD behaves, we need to analyze its monetary policy which is made out of four elements:

* Redemption price: this is the price that the protocol wants OD to have on the secondary market (e.g on Uniswap). The redemption price is used by Vault users to mint OD against ETH and it is also used during Global Settlement in order to allow both Vault and OD users to redeem collateral from the system. The redemption price almost always floats and it does not target any specific peg.
* Redemption price: this is the price that the protocol wants OD to have on the secondary market (e.g on Uniswap). The redemption price is used by vault users to mint OD against ETH and it is also used during Global Settlement in order to allow both vault and OD users to redeem collateral from the system. The redemption price almost always floats and it does not target any specific peg.

* Market price: this is the price that OD is traded at on the secondary market (on exchanges).

* Redemption rate: this is the rate at which OD is being devalued or revalued. The process of devaluing/revaluing OD consists in the redemption rate changing the redemption price.

* Global Settlement: settlement consists in shutting down the protocol and allowing both Vault and OD users to redeem collateral from the system. Settlement uses the redemption (and not the market) price to calculate how much collateral can be redeemed by each user.
* Global Settlement: settlement consists in shutting down the protocol and allowing both vault and OD users to redeem collateral from the system. Settlement uses the redemption (and not the market) price to calculate how much collateral can be redeemed by each user.

Let's walk through an example of how OD is revalued in case of capital inflow of some Liquid Staked Token that we can call lstETH (meaning people are bullish on lstETH ):

Expand All @@ -127,9 +130,9 @@ Let's walk through an example of how OD is revalued in case of capital inflow of

* At time T3: lstETH remains at $1000 and OD's market price is still $0.95. The protocol wants the market price to get close to the redemption price. In order to eliminate the imbalance between the market/redemption prices, the system starts to revalue OD. Revaluing consists in setting a positive redemption rate which makes the redemption price grow every second.

* At time T4: lstETH remains at $1000. OD's redemption price is now $1.05. Vault users are starting to realize that they can now borrow less OD per one lstETH, they can redeem less lstETH during Settlement (because OD is now more expensive) and that it will be more expensive to close their Vault once the market price follows the redemption price. At the same time, OD holders are starting to realize that they can redeem more and more ETH during settlement.
* At time T4: lstETH remains at $1000. OD's redemption price is now $1.05. Vault users are starting to realize that they can now borrow less OD per one lstETH, they can redeem less lstETH during Settlement (because OD is now more expensive) and that it will be more expensive to close their vault once the market price follows the redemption price. At the same time, OD holders are starting to realize that they can redeem more and more ETH during settlement.

* At time T5: lstETH remains at $1000. OD's redemption price is now $1.10. OD's market price surged to $1.01 as a result of Vault users buying OD in order to close their positions as soon as possible instead of later on when OD is more expensive.
* At time T5: lstETH remains at $1000. OD's redemption price is now $1.10. OD's market price surged to $1.01 as a result of vault users buying OD in order to close their positions as soon as possible instead of later on when OD is more expensive.

When OD is devalued (in case of lstETH capital outflow), the opposite thing happens:

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85 changes: 85 additions & 0 deletions docs/testnet-guide.md
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---
description: A guide for using the Open Dollar testnet application.
---

# Testnet App Walkthrough

## Getting Test Tokens

1. Begin by navigating to [https://opendollar.com/testnet](https://opendollar.com/testnet) in your browser.
2. Click the Discord icon in the menu bar or Discord link on the page to join our server.
3. In the server, click the "🤖｜open-bot" channel, type "/claim", and paste your wallet address.
4. After a few seconds you will see a message confirming the deposit of the tokens.

## Connecting to the App

1. Navigate back to [https://opendollar.com/testnet](https://opendollar.com/testnet) in your browser.
2. Click the blue button on top of the page "Launch Testnet" leading to the app page [https://app.dev.opendollar.com](https://app.dev.opendollar.com/)
3. Connect your wallet by clicking the "Connect Wallet" button.
4. Add the "Arbitrum Sepolia" testnet to your wallet & switch networks. [https://chainlist.org/?search=arbitrum+sepolia&testnets=true](https://chainlist.org/?search=arbitrum+sepolia&testnets=true)
5. Click "Create Vault Facilitator" and complete the transaction.

## Creating a Vault

1. Click "Create Vault".
2. Select the collateral type to deposit.
3. Enter the amount to deposit and how much $OD to borrow.
4. Click "Approve (Token)", this will initiate a transaction.
5. Click "Review Transaction" to see an overview of your vault.
6. Click "Confirm Transaction" to create your Open Dollar vault.

## Viewing your NFVs in Metamask

Once your NFV is minted, you can view it in your Metamask wallet by adding the contract.

1. Open Metamask and select the NFT tab.
2. Click "Import NFT".
3. Input the contract address: 0x677Bd90AB6A27552D0744a0Af196DA127f014656
4. Input the Token ID, which is your your vault number without the "#" symbol.
5. Click "Import".

## More Vault Functions

### Deposit collateral

1. On the app page [https://app.dev.opendollar.com/#/](https://app.dev.opendollar.com/#/) click on your vault.
2. Click "Deposit & Borrow" at the bottom of the menu.
3. Enter the amount of new collateral to deposit.
4. Click "Unlock (Token)" & sign the transaction to approve adding more collateral.
5. Click "Review Transaction" to preview your updated vault.
6. Click "Confirm Transaction" & sign the transaction to update your Open Dollar Vault.

### Borrow $OD

1. On the app page [https://app.dev.opendollar.com/#/](https://app.dev.opendollar.com/#/) click on your vault.
2. Click "Deposit & Borrow" at the bottom of the menu.
3. Enter the amount of $OD to borrow.
4. Click "Review Transaction" to see your updated vault.
5. Click "Confirm Transaction" & sign the transaction to update your vault.

### Withdraw Collateral

1. On the app page [https://app.dev.opendollar.com/#/](https://app.dev.opendollar.com/#/) click your vault for other actions.
2. Click "Repay & Withdraw" at the bottom of the menu.
3. Enter how much new collateral you'll withdraw & how much $OD you'll repay.
4. Click "Review Transaction" to preview your updated vault.
5. Click "Confirm Transaction" & sign the transaction to update your vault.

### Repay $OD

1. On the app page [https://app.dev.opendollar.com/#/](https://app.dev.opendollar.com/#/) click your vault for other actions.
2. Click "Repay & Withdraw" at the bottom of the menu.
3. Enter the amount of $OD to repay.
4. Click "Unlock OD" & sign the transaction to approve the use of your $OD.
5. Click "Review Transaction" to preview your updated vault.
6. Click "Confirm Transaction" & sign the transaction to update your vault.

### Closing a Vault

1. On the app page [https://app.dev.opendollar.com/#/](https://app.dev.opendollar.com/#/) click your vault for other actions.
2. Click "Repay & Withdraw" at the bottom of the menu.
3. Enter the total amount of collateral you have deposited into this vault.
4. Enter the total amount of outstanding $OD you have borrowed from this vault.
5. Click "Unlock OD" & sign the transaction to approve the use of your $OD.
6. Click "Review Transaction" to see your updated vault.
7. Click "Confirm Transaction" & sign the transaction to close your vault.
1 change: 1 addition & 0 deletions sidebars.js
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Expand Up @@ -23,6 +23,7 @@ const sidebars = {
label: "Overview",
items: [
"README",
"testnet-guide",
"faq",
"glossary",
"community-resources"
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