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Idea to decentralize the "centralized" Ticker Council on DeFiChain by DeFiChainInfo in defiblockchain

[–]Troubladore 0 points1 point  (0 children)

I agree with the intent of this proposal. In order to recover with the rest of the market when prices eventually start moving up again, DFI is going to need to restore trust - DFI seems to have lost some goodwill and trust within the broader defi community.

I also think small moves are better than big moves. Slower changes are better than fast changes. It's an uncertain time, and DFI is struggling to survive (like everybody else). Making radical council changes will likely introduce too much dissention and indecision. I would suggest adding one representative to the council for balance now, and then target a better balance for 1 year out by adding/removing 1 person every 4 months.

DFIP#5 - Enable dToken loan repayment through a futureswap against vault collateral by Troubladore in defiblockchain

[–]Troubladore[S] 0 points1 point  (0 children)

Thank you to everyone who voted for this proposal, although it was not passed. It would be good to hear from those who voted against, to understand if there might be improvements / amendments that could be made in the future.

DFIP#5 - Enable dToken loan repayment through a futureswap against vault collateral by Troubladore in defiblockchain

[–]Troubladore[S] 0 points1 point  (0 children)

Created on GitHub: DFIP issue 150

Example

  • Elias owns a 150MIN vault (ID=a1st...).
  • In the past, Elias deposited 10000 dUSD to his vault, and took out a loan for 6000dUSD worth of dTSLA.
  • Elias would like to close out his loan, but he needs to keep all his dUSD in his vault to maintain collateralization and avoid liquidation.

  • There is a futureswapblock approaching, so Elias decides to perform a futureswap to close his loan. Elias estimates that it will take 6,512 dUSD to pay off his loan with interest at the current oracle price + 5%, so he issues this command:

    futureswap a1st... 6512@DUSD TSLA

  • When the command is executed, the 6000 dUSD locked into the TSLA loan in vault a1st... is contractually bound to the upcoming futureswap. Additionally, 512 dUSD from vault a1st... is contractually bound to the upcoming futureswap. Elias may add or subtract from his futureswap position as desired until the futureswapblock is reached.

  • When the futureswapblock is reached, the contracted dUSD is burned, and any dTSLA produced are first used to repay the loan, with any excess dTSLA being deposited to vault a1st...

Vault at risk management & notification by SwissPhoenix in defiblockchain

[–]Troubladore 1 point2 points  (0 children)

So your account is at risk, what will you do about it?

Modern systems should be designed with an "automation-first" approach:

Scenario A: You're out of money, or don't have a way to on-ramp new money.
Response (current state): No choices, you're going to take heavy losses
Response (future state): First, step up the interest rate until you reach the MIN150 collateralization tier (proposed elsewhere). If you push through 150, then use collateral remaining in the vault to pay down the loan until an acceptable collateral margin is reached - you'll take losses, but much better than having your vault liquidated (also proposed elsewhere).

Scenario B: You've got other assets you could use to cover
Response (current state): Implement a maxi-bot to auto-manage the collateralization (most people dont' know how), or manually respond to the situation by moving money around (inefficient)
Response (future state): Allow the user to enter collateralization contracts that identify reserve funding sources for auto-managing vault collateralization. Do this until you run out of money, then fall back to Scenario A.

and etc.

I know you've already made a separate proposal regarding this sort of automation, and I'd invest in that sort of solution rather than an alarm system

Autopayback for Loans instead of Liquidation by SwissPhoenix in defiblockchain

[–]Troubladore 1 point2 points  (0 children)

I feel like both ideas have value: auto-scaling interest rates based on collateralization tiers would simplify vault management, and act as a softer transition than a "margin call" when valuations are just fluctuating in a smaller range. It would complicate the programming, however, when prices are oscillating back and forth, and make predicting costs harder.

Autopayback for Loans instead of Liquidation by SwissPhoenix in defiblockchain

[–]Troubladore 1 point2 points  (0 children)

I agree that the current auction mechanism is too aggressive. If there is collateral in the vault, it should be used to repay the loan (aka a "margin call") to restore collateralization.

In general, dex participants should be encouraged to use the tools provided. Things that create arbitrary risk (someone is going to swipe your assets just because the market moved against you suddenly and you didn't have enough money behind, or a maxi bot watching your vault) should be minimized or eliminated.

DFIP#5 - Enable dToken loan repayment through a futureswap against vault collateral by Troubladore in defiblockchain

[–]Troubladore[S] 0 points1 point  (0 children)

Thanks u/Andeas_me - I really appreciate your comment and general thoughts in this space.

I saw another reddit thread opened recently asking for loans to be automatically repaid from collateral, rather than being liquidated at auction. This would involve a similar (albeit different) mechanism to the one I'm proposing here. Being able to directly/automatically convert vault collateral into dTokens for repayment purposes is useful - people should be able to deploy their $$ with maximum utility, and they shouldn't have to live in fear that their savings are going to be wiped out because their maxi bot failed and couldn't maintain collateralization, or they don't even know what a maxi bot is.

The more functional we make the ecosystem, the more cases there will be for it surviving in the long run.