Do not bailout liquidated individuals with treasury funds

1. General Discussion
#81

The vote premise here seems flawed.

  1. The treasury has already spent the money to buyback the wMEMO below backing. Additional funds don’t need to be spent. The “funds” can just be re-distribute from the pre-burned wMEMO being held.

  2. The goal is to make whole the people who believed in participating in the ecosystem which generates fees for the ecosystem and believed in the promises made by Wonderland leadership (ie, executing buybacks to maintain a price floor, which is exactly what failed here). Don’t you want to know that Wonderland has your back? Well, here’s proof that they do, even if you don’t believe that taking a loan with a liquidation price 50% below backing is something worthwhile for you.

  3. As stated by Dani: “No very small liquidation tbh…”. Looks like more of a sell off that the system wasn’t prepared for, rather than a full on liquidation cascade.

#82

It’s a difficult situation. No matter what Sifu & Dani choose to do, some people will be unhappy.

If nobody is repaid, then the credibility of Wonderland will be permanently damaged. People were assured that buybacks would occur around the backing price and this is the second time this system has failed. If no effort is made to remedy this, then Sifu and Dani will never regain the trust of current and prospective frogs.

However, this does also send a message that people can freely leverage at the backing price and the treasury will have always their back - there are no consequences for what is otherwise considered a high risk move.

If reimbursement for liquidation is paid from the treasury funds, this negatively impacts the wMEMO holders who avoid leveraging. People who are more conservative in their strategy will be resentful for bailing out others who are willing to engage in risky behaviour. Wonderland could therefore lose the trust of many of it’s wMEMO holders.

The best solution that I can see is for Sifu and Dani to offer to reimburse those impacted from their own personal funds. That way people who feel that they were unfairly liquidated receive compensation and the non-leveraging wMEMO holders don’t feel as if they (or the wonderland treasury) will have to pay for the mistakes of others.

Whatever is decided, clearly Wonderland needs a concrete policy regarding what happens during this type of event. Of course, hopefully it never happens again.

1 Like
#83

If you or anyone believes “buybacks” somehow save the day, or keep price a certain level in and OPEN market, you are absolutely FOOLISH.
If everyone decided to sell their wMEMO all at once, you think the treasury has enough funds to buy it all AT THE BACKING PRICE?! that’s not how a market works.

1 Like
#84

Whats funny is we have had this discussion before. i ask why? Liquidation with no RISK is literally abuse and gaming the system. Lets not play dumb to the facts while calling what the treasury will use to save them is small . we need every penny at this point.

#86

Did Sifu not say this is the only time due to black swan? Also the loss is minimal dilution to the pool in exchange.

#87

That’s not really how rebases work…

#88

Had the price gone up, would there be any handouts for people who didn’t leverage? The reason this protocol is struggling is due to the crazy leverage. I’m all about helping other frogs, but the way to help is to 3,3 not to 9,9! Holding and not selling is fundamental to the game theory dynamics that buttress the mechanics of the protocol. Borrowing makes it impossible to hold during a downtrend, so these leveraged frogs are not helping other frogs.

I vote in favor of not reimbursing frogs that got liquidated.

5 Likes
#89

I love the fact that mistakes are being accounted for and that Sifu thinks that these helpless people should be helped for their losses. The goal is noble and I really wish that everyone could find themselves in a wealthy place.
But, when you take a loan against your collateral you need to assess the risks, and monitor your position’s health. I’m personally leveraged, as well as a friend of mine whom i convinced to join the project.
It has been very stressful for me to monitor my position health.
Yesterday, I realized a lot of unrealized losses so I could buy more wMemo and deposit it as collateral as well as bail out my friend. It cost me time and money to be where I am now.
If people were to be bailed out you’re incentivizing carelessness and disincentivizing carefulness. I don’t think that this is the culture we’re trying to build.

I wish I could say yes repay the people. I think their pain is more valuable than the short term gains for us. But the implications of such move can’t be overlooked unfortunately.

4 Likes
#90

What Is a Black Swan?

  • A black swan is an extremely rare event with severe consequences.
  • It cannot be predicted beforehand, though after the fact, many falsely claim it should have been predictable.
  • Black swan events can cause catastrophic damage to an economy by negatively impacting markets and investments, but even the use of robust modeling cannot prevent a black swan event.
2 Likes
#91

Yet abra is part of frog nation?

#92

We must 3,3 this. Vote to repay.

I was not leveraged. I was not liquidated. I bought at 7k and am severely down but we need confidence back. Also, we need penalties in the future for over-leveraged degens.

#93

STOP, STOP, STOP SPREADING MISINFORMATION!
NOONE SAID THEY WILL USE Treasure, most of the funds are IN ABRACADABRA!
As thats where they went. So they just returning.
And they are not returning money to cover LOST PRICE OF wMEMO.
they are returning the money that got liquidated to cover the loan.
basically getting person back to the same amount of coins they had @now lower price, just like any other person that did not borrow.

1 Like
#94

I think we’re all debating the wrong thing. We all signed up for the backing price. The first time they were tested, sucked, yeah, okay. They came up with a solution they thought could help, okay it failed too but Why did it fail? It apparently ran out of funds.

Okay, how much funds were there and what was your planned schedule for checking up on the available balance?

Again, we signed up for a backed currency, we also signed up for sifu, so we are also ultimately responsible for all their actions too. We can’t just go tossing the blame around. We’re still getting ourselves figured out and building up defenses, this won’t be a problem forever, but we Do have to deal with some of the scratches along the way if we’re gonna be taken seriously in the schoolyard.

With that in mind, I think we should really be debating:

The maximum threshold below the backing price we feel the protocol should reimburse on This occasion?

What is the maximum threshold below the backing that mechanisms like this are available for Any treasurer to do, in the event of some yet-unforeseen situation where it may be necessary?

PS. I don’t leverage.

2 Likes
#95

Ok man look , say i bought and 7k as well, as i was levereged and my leverege price we 24 or 1/2 of promissed buyback.
Buyback that never happened took the price DOwn to 24k for 30 mins, i did not have time to repay nor NETWORK worked, was congested nothing going throuw.

So say u lost 30% today, and i lost it all or more, what they are propsing to do .
Is to take money that they sold from my account back to me.
Simply because buybacks did not happen.
Now that does not mean U WILL PAY for it.
ITS MY MONEY THAT WAS TAKEN FROM MY ABRACADABRA ACCOUNT.
when i get $ back, we still be in the same boat, we both will be 30-40% down for the day.
I will be same as u.
They are not proposing to PAY ME BACK ENTIRE AMOUNT THAT I LOST DUE TO PRICE DROP.
let me know that does not make sense

#96

image
image1284×713 135 KB

#97

yes that is true but BuyBacks are designed to prevent a cascading effect like a massive drop from ~44,000 to ~22,000 in less than 2 hour.

#98

dude. it would be impossible to have funds to buy up all wMEMO being sold at backing price. it’s not a thing. it can HELP, it can STALL a selloff for a minute, but it’s not a stable price. it’s the value of wMEMO based on it’s Treasury value. wMEMO is bought/sold at whatever the MARKET dictates. PERIOD.

#99

Yes it has almost a BILLION freaking dollars

#100

Hell to the no.

They kept their positions open after the first cascade on Jan 17. I closed mine because I was being responsible.

How is it fair on me for being responsible? Are we purposely trying to encourage riskier behavior?

Ridiculous. My vote is a no and I will vote no on the snapshot.

If Dani/Sifu wants to cover them … that’s fine. Bless their hearts. But not with treasury money.

Hell to the no.

6 Likes
#101

well see i could not loose mine cause of network congestions, my AVAX transaction where in stale mode for over 2 hours.
I lost 12k.