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.
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.
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.
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)
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.
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.
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.
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.
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%
I think it is more beneficial to have those ICX back in the ecosystem than collecting dust in the emergency fund. They will inevitably find their way back to BALN and Dapps and add more utility. They are not a productive asset sitting in the emergency fund. I think this is the time to be as generous as we can to help our own. The more we help now the stronger the community will be going forward. There will still be plenty left in the emergency fund.
The argument from those who were liquidated might be that if this had never happened, and they hadn’t been liquidated, like if the liquidation LTV were 85% all along, then they would have retained the upside from continuing to hold all of their collateral. In that sense, they were still forced to sell enough collateral at the bottom to cover all of their debt.
So I don’t think we are letting them off too easily, they are still suffering some from having maybe held too risky a position, but then we are all suffering some and many of us sold a considerable amount of collateral to avoid liquidation.
That’s why I feel this is pretty equitable compromise.
After taking time to read all arguments of every angle and thought through this thoroughly, I believe this is the best proposal for a compromise where all parts can meet. I believe we should go for this and make a vote out of it.
Are we saying that the parties that DID manage to bring their accounts within the parameters they all signed up for, the current borrowers, that right at this moment still would not get back collateral - debt if liquidated, are they are a lesser citizen than parties that did get liquidated?
People talk about the health of platform, should we not prioritise parties still in the ecosystem, that undoubtedly still suffered finanicial loss but had the risk management to deal with their risk?
I am not against a goodwill guesture, but lets examine the language and sentiment shall we? Bold emphasis mine.
Non specific to the proposal but generally - ‘refund’
it is clear that the system spun out of control with unexpected rebalancing dynamics that hurt most of us, but some more than others.
This will restore those who were liquidated back to the value they held at the time of liquidation.
Those who were liquidated would thus be made whole to the value they held at the time of liquidation
It seems like this level of refund is required. Is it enough?
EDIT: I left out the worst one
Return 1/3 of seized collateral to all borrowers liquidated between Jan 20th and Jan 24th 2022
It also doesn’t miss the chance to take a swipe at Balanced
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.
Is this a proposal for generating goodwill?
This is what it sounds like it does:
Financially incentivises parties who, as per the list above do not give any sort of indication to be parties that are receiving goodwill but in fact parties that appear to clearly generate bad sentiment on the platform regardless of a donation to them or not.
Clearly indicates that parties that managed their positions and suffered financial losses in excess of 66% that they should have just taken it from the DAO instead.
Giving parties liquidated a better deal than current users right now, in fact if you have a 66% LTV ratio NOW closing out your position NOW gives a worser deal than that, because bnUSd is over 1 USD by a bit, while this proposal is basically valuing bnUSD at 1 USD.
I need to say it a second time If you are at 66% LTV now, selling and closing your position now is worse than getting liquidated previously if this proposal passes
The proposal is lacking:
Any sort of indication this expenditure will generate any sort of goodwill or retention of users.
In fact, to me personally, looks to clearly reduce userbase by clearly indicating to current borrowers they are far less important.
Hey @arch , I appreciate your feedback as always, but I’d like to point something out that’s extremely important for the future of Balanced.
As it stands, this is the only proposal. I recognize you strongly disagree with this proposal, but if anything else is to go for a vote, a community member must put forth another proposal. I hope to see multiple proposals. Given your strong opinion, it would be great to see one from you as well. I would hate to see only one proposal go up for voting.
We can set a soft deadline on this thread as to when the on-chain vote should take place.
@particleX of course feel free to adjust your proposal as well given feedback from replies on this thread
