This discussion is already biased in that as those who got liquidated below the backing would’ve lost faith in the project and therefore won’t contribute to the vote/discussion:
But I also agree with some of the sentiments of the the non-leveraged holders.
This thread is to propose some initial conditions for the refund if it was to occur:
Only refund those liquidated BELOW the backing price and during the two ‘black swan/attacks’ on the 18th Jan and 26th Jan
Refund will only occur once and never again
Minimal dilution for treasury funds only and anything above “minimal” to be derived from wSifu and Dani personally
Refunds should potentially be made proportional to the liquidation price below backing price for each individual e.g. 80% below backing = 80% of potential refund
Important statements from wSifu:
“No. Something happening once is obviously not indicative of a new standard.”
“You aren’t being robbed. There is no proposal to take anything from you. If treasury funds are used, you would see minimal dilution.”
“The price fell from 43k to 22k in under one hour. I disagree that they had enough time to pay back that leverage.”
note: AVAX and abracadabra congestions issues also prevented deleveraging during these events
I have been a vocal advocate against leveraging being so easy on the Wonderland ecosystem for these exact reasons. It is unfortunate when someone overleverages and causes a liquidation event that people that do not leverage get punished by a decrease in the value of their investment. I am not one to support bailing out people that gambled.
However people that did leverage way below the backing price and were liquidated should be reimbursed in some manner. These “Black Swan” events are not common and even the most skilled trader could fall victim. If it has minimal impact to the treasury, those who were liquidated below Dani and Sifu should be reimbursed for their looses.
I hope that these Black Swan events are rare, and I would prefer that we have further discussion and eventually a vote on how to fix these issues without using the treasury.
I think all of the proposals ITT are fair, maybe outside of the last. Instead of proportional it should just be a dollar figure (20% below backing or below Dani/Sifu’s price), IMO. Also adding my other points below, as I think the most fair thing would be to be inclusive of flash loaners/deleveragers if you’re going to reimburse liquidations.
I would be in favor of reimbursing both those who got liquidated and those who deleveraged. Right now, the frogs suffering the worst are those who were (able to) actively manage their investment. Ultimately you’re in one of three categories, from best to worst:
You got liquidated;
You held and didn’t borrow; or
You borrowed but managed to deleverage to avoid liquidation. In (1), you get reimbursed. In (2), you only lost dollar value which, to @sifu’s point, we can work to rebuild. In (3), you lost the vast majority all of your coins and won’t be reimbursed–like liquidation, there’s no real coming back from that.
I’m all for frogs helping frogs, but if you really intend on leveling the playing field, help all the frogs that are drowning, not just those who got liquidated.
1- if you got liquidated, then buy again its cheap now.
2- if you deleverage to avoid liquidation, you are all good and in a healthy position, why reimbursement?
3- if you didn’t borrow, you have to get a compensation.
I think this is the right approach
Bailout all speculators using the same compass is not fair: some frogs did not understand leverage and mismanaged risk (e.g. DCA in TIME/wMEMO using MIM borrows), and some large snakes put sell pressure to buy low in forced liquidations. I suggest that any refund must be caped to 1 MEMO, helping frogs mostly (receiving MEMO or SPELL locked, with a 12 mo cliff/vesting to give them time to know the gameplay). Folks investing more than 1 MEMO with leverage can bear with the situation and shall receive just 1 MEMO (SPELL?), without any vesting schedule.