Thank you sir and everyone in the DAO. I am confident we will get through this and be stronger than ever soon. Times like these when dealt with appropriately have the ability to strength the community and are pivotal moments. I urge the DAO to think big picture. Big thanks to everyone who has been working tirelessly.
5 Likes
This sounds like a great solution for the affected ones and for the very future of the DAO and Balanced. It’s in times like these we are tested and I’m sure we’ll get through this.
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I am happy to see steps being taken and communication being put out. I do however still 100% back the idea of full refunds.
This can be done by returning the amount of total Sicx at time of liquidation and also putting the user back in to the loan they were in.
This way the emergency fund only pays back a portion and the rest of the Sicx is coming from the loan being retaken back out. This I feel would be the best option. I do understand why some would be against it, butin his type of scenario I feel this is best while we all have further discussion one how to make the Dex better for everyone.
4 Likes
I see your point here, but this would take considerably longer (making people even more nervous and frustrated as they wait), be considerably more difficult from a development perspective, and have an identical impact from a net worth perspective. When calculating net worth, debt is negative.
Here is an example, hope this helps!
Bob:
Collateral = 100
Debt = 67
Net Worth = 33
Alice:
Collateral = 33
Debt = 0
Net Worth = 33
Bob and Alice have identical net worth. Giving back 1/3 of a borrower’s collateral at time of liquidation would be identical, in net worth terms, to what you suggested because people were liquidated at 66.67% LTV.
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I can see how that makes sense and would be difficult. So pretty much the idea would for example and easy number if I had perfectly 100,000 Sicx at time of liquidation then with this refund being 1/3 I would get back 33,333.33?
I still feel that’s a little low, but I also do feel that is better then losing everything.
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Hmm, perhaps shoot me a DM? I’ll try to explain 1 more time, but the sentence I quoted above has me concerned that you didn’t grasp the fact that they are identical. I’ll use your example.
Bob prior to liquidation:
Collateral = 100,000 worth of sICX
Debt = 67,000
Net Worth = 33,000
Bob After liquidation and after this possible reimbursement process:
Collateral = 33,000 worth of sICX (based on the price at time of liquidation)
Debt = 0
Net Worth = 33,000
They are identical, nothing is lost. Giving back anymore than 33,000 would actually be paying people to get liquidated, so that’s why I was confused by your comment. Hope this helps. If you still don’t understand, please DM me as to not clutter the thread.
Although I of course would prefer 100% of my coins back as i didn’t expect the rebalancing …
Im willing to accept that I for one (not saying everyone else included) didn’t read as much into it as I should have and understood everything.
I am grateful for something rather than nothing as no body has to do anything.
I think other users not affected will also agree with it as they are only losing the loan!
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Agreed here also. That’s seems pretty fair to me.
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Allright allright! As much I would love a 100% refund (who doesn’t) of all my 200.000 ICX that got liquidated lets also be honest with each other and to ourselfs. Nobody saw this shitstorm coming and nobody was expecting this kind of effect of reversed balancing. yea, I know the feeling! Watching painfully how your liquidation price is going up and you can’t do shit about it feels very helpless. But you know when your loaning money you take a risk of getting liquidated. We all knew what we where getting into. I think this proposal is more then fair, realistic and suited.
But most of all, lets make sure this will never happen again and think of better ways to revise the rebalancing mechanisms.
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I understand it’s a more difficult ‘solution’, but I also agree on this one. Some people indeed lost because of bad choices, but others lost important (life) investments in a project they truly believe in, because of circumstances that could not have been foreseen and they were impossible to escape from this liquidation. Offcourse we made the choice to take out a loan ourselves, but even if you did very responsible, it took you off guard.
Offcourse I would be happy with A refund of the liquidation fee rather than NO refund, but I will be left with mixed feelings and a dent in my confidence.
I just feel bad… Always defended the project in my private community and now I lost a big part of my investments with it 
I respect everybody’s meaning about this situation and I will also respect every outcome, these are just my thoughts.
2 Likes
I am excited to see proposals discussed. As a voter, I am way more likely to vote in favour of a proposal that has had input from the community before being posted for a vote.
Suggest to use standard liquidation fee, align with all player. we can lower 0.5% to 1% as special discount compare to other platform
The thing is now we need someone who is willing to put up BALN to create the proposal for everyone to vote on.
From what it seems everyone is open to doing is whatever the amount of Sicx that was liquidated you would get back 33% of it.
Example you were liquidated 100,000 Sicx. You’d back 33,333.33 Sicx
You would also have to go and claim it somewhere in the app from what I understand from one of @benny_options posts in here ( correct me if I’m wrong on having to claim)
1 Like
Title: Return 1/3 of seized collateral to all borrowers liquidated between Jan 20th and Jan 24th 2022
Eligibility to claim sICX: Balanced borrowers liquidated between Jan 20th and Jan 24th 2022
Amount of sICX to use: 1/3 of the liquidated amount - 1.954M sICX out of the 2.27M sICX held in the emergency reserve.
Hey guys, Just copying this from the other thread…
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.
- The emergency reserve holds sufficient sICX to cover this. Roughly 1.954M sICX would be paid out from a reserve of about 2.27M sICX.
- 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.
- 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.
- 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?
- A vote will be proposed to take this course of action.
- Another vote would be proposed with the specific list of refunded addresses and amounts so everyone can see and confirm.
- 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.
16 Likes
This sounds good to me. I 100% back this
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Makes sense. I support and think this is a step in the right direction. Thank you for taking the time to put this together. If there ever was an emergency time I would indeed agree that this was it.
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I support some kind of refund like the one posted by particleX. I’ve been pretty vocal on other social media with my thoughts. As a baln holder and Staker I think this event will create a negative connotation that will follow baln from this point forward.
There are both sides to every argument. And one thing to consider. The etc chain was basically created because users didn’t agree with the dao refund. You tell me which chain has more value in todays market?
Personally I think the ones who are arguing against any refund either A) didn’t hold a loan through this mess B) stand to profit most from being a liquidator.
You couldn’t control it, the lowest risk possible became high risk with no control of your own. Other than to close out entirely. Which cascaded onto others the issue. I spent the last 24 hrs of my vacation trying to stop a complete train wreck. A 100x position is easier to manage. That’s not a bank I want to be involved with.
Personally, I won’t be minting bnusd ever again. The level of unmitigated risk is some thing I’ll never expose the fund to again. And that’s where the main issue lies. How to grow from here. If the only way to mint bnusd is through loans the issue of rebalancing into a cascade of liquidations remains.
Pegging bnusd to multi assets is one of the ways out, which I could then re enter the bnusd market.
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I feel it’s quite generous. The DAO emergency fund would be covering just under a third of the refund (roughly 586,000 sICX), using previously held sICX.
I’m not saying I’m against this proposal. Just that it covers the fee paid to liquidators as well, in an effort to make the liquidated whole again ~ that’s the part that I feel is generous.
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There are discussions happening:
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If it would come to a vote I would vote yes on this but as previously stated by Awaxjago this would be very generous. Its bassicaly a full refund and will take aditional sicx from the fund to cover. Perhaps a proposal to devide and give back all the sicx added to the security fund between the 20th and 24th of january would have a better chance of succeeding. In that case it would be like it never happened for all other users. It would result in a refund around 25%
2 Likes