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.