I believe, you believe but vote rejecting reverting to good old Balanced.
The only thing critical for Balanced is not having debt be bad, and that is a function of the liquidation threshold and allowable bnUSD range.
I am not feeling the example given, if ICX falls 24%, that scenario is only true if noone trades sICX at all. In reality what happened when ICX fell was people sold ICX for bnUSD raising bnUSD price over 1USD instead of having bnUSD fall below 1USD.
Additionally, in your example, that is the 100% best time to have no lock. Let us go through the example again. If ICX falls 24%, first of all for bnUSD to have a 0.85-0.87 USD peg is extremely unlikely as the peg is 0.9 so even allowing for some gap for the rebalancers, it wouldnât go to 0.85. Either way, lets say it does. So bnUSD is 0.85 now, due to ICX both falling, and noone selling it, or even worse people mass buying it with bnUSD as it falls.
Okay so bnUSD is 0.85USD, remember this means if ICX ~ 0.5USD, that its selling for around ~0.588USD on the DEX. Thats in plain ICX terms. The borrowers (if not locked) can withdraw collateral, sell sICX/ICX and repay debt, both stabilising the peg, and profiting this strange occurance.
In reality, during a crash, the price of sICX/ICX on the DEX buying ICX for more than CEX prices or more importantly for the price in the past is extremely unlikely.
EDIT: I also want to point out this selling ICX to repay debt would also happen automatically as the rebalance point is 0.9, so as it dips a bit below that, rebalancing would sell the collateral and reduce debt, both stabilising the peg and reducing their risk. No lock just means they can do rebalancing on their own.
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Just wanted to highlight this seperately, If they are shorting ICX they are gaining when it falls. I am not seeing the profit for the people being liqdated in this scenario.
Ok, I see that I misunderstood the word peg, and used it in the wrong context.
I used the buying power of sICX against bnUSD.
Would you please be so kind and redo the calculations so that the price of bnUSD is 1.10.
Keep in mind rebalancing is not automatic, itâs real people calling the function. And they only do so when itâs profitable. A single rebalancing call costs 0.13 ICX. A swap on balanced costs 0.3% and the slippage depends on the size of the swap. Currently a 1000 sICX swap to bnUSD has a 0.04% slippage
For rebalancing to be profitable, all those previous costs have to be covered x2.
The LTV proposal was rejected.
What about the rebalancing threshold then?
Rebalancing was one of the main sources of income for Baln stakers.
We canât just let Balanced go into hibernation for two months.
There is a discussion about proposing an asymmetrical peg:
As well as a discussion proposing a rate limit to positive rebalancing that may provide borrowers some certainty with positive rebalancing:
I have seen those, but what is the expected implementation time on those if they pass?
Current outlook is that the devs are now focusing on writing the smart contracts in Java, which is going to take around 2 months.
Are they willing to implement those changes in python in the meanwhile, if they will have to do it in Java later anyways?
Continuous rewards has already been pushed into Java.
Asymmetrical Peg âshouldâ be pretty easy to implement as it is adjusting parameters of rebalancing.
Positive Rebalancing Rate limit may be easy to implement as well. Again as it is just adjusting parameters.
Negative Rebalancing by LTV might need development time as it requires organizing borrowers by LTV.
I could be completely wrong.
Further, in the DAO fund proposal area there is a thread for a stability fund that could be voted on. Development might be near complete on that.
Once the rebalancing contract is re-written in Java, some of these smaller changes can be implemented, such as asymmetric peg and rate limiting. The LTV sorting needs to happen on Loans, which will take longer to translate into Java. I expect rebalancing to be done this month
Thank you for clarifying.
Seeing as the DAO is rather split on which direction to take going forward, I think more opinions need to be expressed by people who have remained quiet.
My opinion is that the current rebalancing mechanism works as intended. If we donât want to decrease locking ratio, we should re-introduce the rewards-threshold at around 20-30%. And maybe increase the borrower rewards,