Liquidation event (refund)

Fully agree, ICON has the best community. For years and years already we keep supporting. Please don’t let us down now.


Wow, this is horrendous. I didn’t get liquidated but I feel for all the victims that are blamed for being greedy that actually had a good risk management but got stuck by the system error. I agree with Iconist, it can’t be referred to as no other than system failure. If not, this whole platform is broken and a gambling platform. Honestly. People will never take large scale loans on Balanced again if this is not resolved, I can tell you that. We must get a fair solution to this asap and move on.


The most recent round of liquidations is unprecedented. Dozens of positions were liquidated, which haven’t happened before. Even during the May 2021 crash, there were very few liquidations. I don’t have answers for #2 and #3. For #1, I don’t believe it is necessary to refund previous liquidations because they were not directly or indirectly caused by constant rebalancing over a period of days.


I think we should bring this massive liquidation event under more attention and would like to hear a statement from the ICON foundation and Min Kim.


And I at least haven’t seen any leadership reply on here on what is being done. Maybe I have missed it but I don’t see any and this stuff needs attention ASAP and Al should be a priority.

I get refunding everyone 100% is tough but there is more then enough funds in the emergency reserve to cover this and this is an emergency situation.

Not doing this would look really bad on icon as a whole and lot of users will walk away from balanced. The dex can’t survive if the user base keeps dwindling down. Multiple large BALN holders have mentioned that in telegram.

This is really a no brainer in my eyes. Can we please see some process from leadership on this?


Yes, I agree. This was a big scandal and sweeping the problems under the carpet is a bad idea. If Icon Foundation does not come out with a statement, one can wonder if they really care about the community and investors at all. Like stated continuously, this was NOT an ordinary liquidation, it’s closer to fraud in my honest opinion. Like people mention, even after repaying nearly half of the loan, bringing the liq price much lower, they still got liquidated as a result of complete failure in the system. These issues should be solved here within the DAO. If not, this is such a grave mistake that we could take the story to crypto media sites like Cointelegraph. Maybe then we get the attention from Icon Foundation and Min.


Hey guys,

First of all i want to express my support for everyone that has been affected by last week’s liquidation event. Personally i think it is terrible to see someone’s life savings go up in smoke, whatever the risk they chose to take.

That being said, this can never be blamed on someone else than the investors themselves. Balanced functioned as it is supposed to function. The truth is in the contracts & documentation. We all just chose to invest in something we didn’t (fully) understand. Sometimes that turns out ok, and sometimes we end up burned. The entire crypto space is filled with warnings to do you own research, and not rely on other people’s words.

That what happened is terrible, does not mean Balanced owes us a refund. The primary goal of Balanced is, and should be to provide value for its token holders (Mission of Balanced Governance - #9 by Uglyrage).

That balanced functioned as it was supposed to function, also doesn’t mean i agree with how it functions as can be referenced here: (Enhanced Borrower Experience - #16 by Uglyrage)

But then again… we all have had the opportunity to understand the ramifications of the rules, suggest improvements, or choose not to partake.

If we want a vote for reimbursement to have any chance of succes. we need to consider it from the perspective of the Baln token holders. What is the investment thesis on reimbursing people being liquidated. On this i have some questions i would ask you all to consider:

  1. What is more damaging to the repution of the platform. Rules that turn out bad for some users, or changing the outcome of following the rules with impunity?
  2. Does balanced stand to gain more future profits by reimbursing people than by keeping the cash allready safe in wallet?
  3. is reimbursing liquidated positions the most advantageous way to spend that cash, or would it be more efficient to spend the money on marketing or development or whatever. Maybe even pay one of the big think tanks to suggest improvements on the protocol itself.

While i am against reimbursing liquidated positions right now. I would very much be willing to consider a proposal where those points are considered.

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In this case it’s not only a question about what is best for Balanced, that is a part of it but it’s mainly about protecting its users. That’s my opinion. This liquidation could have happened to anyone having even a small loan on this platform. What’s the point of using the fund to promote a broken DeFi? So that more people can be fooled? First, we must fix it, build up trust again, then think about expanding. Now it’s not safe for anyone to use the services on this platform. Much better to be margin trading on ByBit at this current moment.

And one more MAJOR point! The fees are the least that should be refunded, why? Because the ridiculously high penalty fees took a bunch of our collateral and that went DIRECTLY to the DAO fund. Hence, a great amount of the DAO fund is the money of the liquidated. It’s our money! I consider this stolen money as we have never seen a disclaimer or warning about this. Using this money to promote Balanced is yet another punch in our faces. Most of us were shocked to see our accounts completely empty with no history records, because Balanced took nearly 40% more than what was necessary to pay off the loan!


100% agree with ICOINIST! Thanks.


100%!! Thanks and for more support like and reply!


Is there anything in motion to vote on yet?

a refund must be made


full refund can’t be done. that’s absurd. how gonna feel people wich sold other assets to pay back loan?
part refund can be ( thats why dao fund exist?)

I think it could be a refund with a fee penalty or something as of the rebalancing

I just noticed that there is a better place to continue this discussion in another thread. Please see this post here - Liquidation Fee Discussion - #119 by particleX

Hey guys,

There is general agreement that some refund should be made, and it is clear that the system spun out of control with unexpected rebalancing dynamics that hurt most of us, but some more than others. Since this is different than the May crash I’d propose the following only apply for those liquidated in the most recent crash.

At the time of liquidation accounts had an LTV of 100:150, so 2/3 of the collateral value went to covering the debt and 1/3 went to incentives or into the emergency reserve fund.

Proposal: Balanced DAO refunds 1/3 of liquidated collateral value to those who were liquidated. This will restore those who were liquidated back to the value they held at the time of liquidation.

  1. The emergency reserve holds sufficient sICX to cover this. Roughly 1.77M sICX would be paid out from a reserve of about 2.27M sICX.
  2. This means Balanced would be covering the value of the incentive fees out of previously accumulated sICX. This seems like the sort of emergency this was retained for.
  3. Those who were liquidated would thus be made whole to the value they held at the time of liquidation, plus they would be free of any debt, so they would be free to redeposit with Balanced or not.
  4. To accomplish this we’ll need some smart contract work - @benny_options - can you check with the devs to see what is possible or already in progress?
  5. A vote will be proposed to take this course of action.
  6. Another vote would be proposed with the specific list of refunded addresses and amounts so everyone can see and confirm.
  7. Considering that we seem to have had as high of vote participation in the 1-day votes as we did with recent 5-day votes we could also go with shorter vote durations for these in order to get the funds available sooner.

It seems like this level of refund is required. Is it enough? If someone else has an idea for another specific proposal please detail it out for us.

Balanced will have to go further to incentivize borrowers to take on the risk of a loan going forward, and serious thought needs to be given to other approaches to maintaining the bnUSD peg.

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Hey folks - I recommend to head over to the below thread

From what I’ve heard, I believe most of us did sell assets to try to manage the outrageous loan mechanics. I myself sold 16,000, which should have been ample enough to keep the loan to a low amount, yet was still liquidated.


Dear all,

I’ve created a further topic on this to open up discussion on how borrowers should be reimbursed for their losses too:


I posted this in a related discussion, and found out it belongs here. Sorry for the double posting.

My suggestion is as follows. The liquidated parties will be reimbursed up to 50% of their holdings before the crash. The way I propose is this:
Community members are asked to donate what they feel like, and are given a one week window.
The DAO then matches the resulting final tally 1:1, until we reach 50% of what was liquidated.
In case community members donate more than half of that 50%, the DAO will pay out less. In the reverse case, the DAO will pick up the slack.
Personally, I feel this will test whether the community is on board, a kind of put your money where your mouth is, and it will foster community spirit, since it involves the community in a search and rescue.

I made a new post! Please lets have a good conversation about making a better proposal