Hi Uglyrage. Thanks for the reply and I couldn’t agree more.
I agree that the reimbursement to users who got liquidated shouldn’t be mandatory. It would be a good will gesture and is being done to maintain a good user base.
I would have been fine seeing no funds refunded to anyone but I do think refunding people who were liquidated would be a good step for the future of Balanced.
I’m on the same wavelength as you. Although I don’t think it’s mandatory that people who got liquidated should receive refunds, if they are refunded I think it only makes sense that borrowers be considered too. It should be no one gets refunded or else everyone is accounted for.
I unfortunately can’t put forward a proposal as I had to liquidate all my BALN to avoid being liquidated. I hope to get it back with time but I took quite a big hit with the amount I needed to sell off.
I agree with the statement that all borrowers should be appricieted.
However I dont fully agree with this statement.
The liquidation fee was ofcourse only applicable on those liquidated. I would suggest to put out 2 proposals to vote on. Im at work now on my phone now but ill put them in the format tonight (unless someone is first)
Proposal 1: return the liquidated sicx in the emergency fund to the liquidated people. Making like it never happened. The liquidated borrowers lost the liquidator fees but get back around 25%
Proposal 2: distribute 5% of the DAO baln to all borrowers. If we want we could set the date/time on that on strategic timeframe causing the borrowers that stayed with us till the end the people that can claim. I will think about a good timeframe later today
The 5% is just coppied from above so I have no particular reason to set it on 5%
EDIT: after consideration I would do it in one text proposal but still both events. Because if seperate it would be unfair if only proposal 2 passes.
This is not really true, people not liquidated knew they would lose all of it at 67% LVT, which is what led to whatever actions they took to prevent it. All conditions are identical for all borrowers. The threat of that liquidation fee no doubt factored heavily into the choices of borrowers keeping their positions afloat.
The implication of 15% liquidation fee is either a lower liquidation ratio, or getting collateral returned, both would factor differently in the actions a person takes to keep their position open.
The thinking that the people not liquidated got off with zero reprecussions from the effective liqudiation fee of 33% is directly the part of all this that is most harmful to the health of Balanced, and the thing I oppose the most from other proposals.
I’m 100% in agreement with everything you’ve said here. I created a post elsewhere (Liquidation event refund to account for both parties - #4 by Simon) in a similar vein but I hadn’t seen your post. Sorry for the confusion. I’m new to the forum and am just seeing now that I posted that in the wrong section.
Your post is a much better idea. Thanks for putting this together @arch
This proposal (or perhaps a variation of it) makes the most sense to me so far. I think if refunds are being done (which shouldn’t be mandatory and is a goodwill gesture) that all borrowers should be accounted for.
Those who maintained the bnUSD peg and paid off their debt accordingly also suffered losses
I like this proposal because it accounts for the liquidated people’s collateral the best way, that they get back their fair share. The amount people get back should be dependent on their collateral. Those who were liquidated got affected the most. They were left with nothing.
@Richard is onto something. I suggest the @particleX proposal and because non-liquidated borrowers also suffered we could provide some goodwill to them by giving what is the rest of the emergency fund to them, not splitting it equally but calculated by their loan size. Could also consider using 5% of the BALN in the DAO like suggested by @arch. Doesn’t this make sense? It accounts for all affected by the error and in a calculated way.
This is just my opinion, but continous referal to it as an error or discounting the steps taken by non liquidated parties will in my opinion turn opinion against the proposal sour.
As will suggestions involving removing all emergency funds, again just my opinion but you will be hard pressed to find a staker to back those motions
This nails it. 25% back from the liquidation fee to those liquidated makes sense since the 10% part to the liquidator is gone. Separating the two proposals like that makes sense. I would support both.
Most of the emergency fund was built up in a few hours during the crash and it’s basically the money of the liquidated users. It’s no big deal to use it all to give back to the liquidated users. Because it’s an emergency. The emergency fund will build up again fast if there ever is a new emergency.