What happens in case of bad debt for isolated pools?

Question

Venus Protocol

Karim

What happens in case of bad debt for isolated pools?

#blockchain #cryptocurrency #english #venus

0

01.08.2023

7 ответов

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Karim Автор вопроса

Deborah | 🇳🇬 Never DM First 🇳🇬
Hello Karim. In Venus, security is paramount. Venu...

My understanding is that IL is for high risk assets and shouldn't be covered by risk funds which should only be used for the main pool. Shouldn't there be a clear set of independent rules for IL?

0

01.08.2023

NoOneVII | Serhan |

Isolated Market dynamics are different from Venus Core Pool. There are details such as liquidation Threshold and bankruptcy processes. We also have many security measures for an issue that may occur there, we have activated them with more than one VIP. You can see the details of activated IL assets in VIPs at app.venus.io or Governance Watch group

0

01.08.2023

Karim Автор вопроса

NoOneVII | Serhan |
Isolated Market dynamics are different from Venus ...

I understand. Still the risk is higher than traditional assets which is the reason for separation. If main pool resources would be used to cover for any bad debt, then it wouldn't be truly separated in it's entirety. For instance in uniswap, if a pool is drained, other pools aren't affected and users of the drained pool take the full hit. I thought this would be the same for IL, if an asset gets manipulated, and a pool is drained, users of this pool should be the only ones talking the hit, not the entire protocol users.

0

01.08.2023

🅳🅰️🅽🅽🆈 BD Lead |Vanguard Team Lead | Venus Protocol

They are entirely isolated but remember that the revenues from each/any pools contribute to the risk fund as per our Tokenomics so it's normal that a part of the revenues allocation from the IL Pools goes to our risk fund as well.

0

01.08.2023

Karim Автор вопроса

🅳🅰️🅽🅽🆈 BD Lead |Vanguard Team Lead | Venus Protocol
They are entirely isolated but remember that the r...

IL can have their own independent risk fund for each pool coming from each pool's revenue. I honestly wouldn't want to get stuck in covering more bad debt coming from manipulation of a meme coin (it's only a matter of time before it happens).

0

01.08.2023

🅳🅰️🅽🅽🆈 BD Lead |Vanguard Team Lead | Venus Protocol

Karim
IL can have their own independent risk fund for ea...

Risk parameters are a lot stricter on IL Pools. When liquidation happens if it happens it'll be just as regular core pool liquidations and only assets in these pool can be liquidated. Look at the risk parameters for each assets. Very conservative. It will never affect the core pool.

0

02.08.2023

Deborah | 🇳🇬 Never DM First 🇳🇬 · Accepted Answer

Deborah | 🇳🇬 Never DM First 🇳🇬

Hello Karim. In Venus, security is paramount. Venus tries as much as possible to prevent situations that could lead to shortfalls. Nevertheless, we have a set of potential risk response mechanisms, there is a set aside risk fund for handling bad debts.

0

01.08.2023

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What happens in case of bad debt for isolated pools?

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