An update on the cascading liquidations that occurred in the

Question

An update on the cascading liquidations that occurred in the

SigUSD pool.

What Happened?
After looking through the transactions there did not seem to be any clear malicious attack on borrowers, but rather a natural market downturn turning into a cascade of liquidations.

This was the largest volume of liquidations duckpools has ever seen, so large that some loans were even liquidated at a loss to lenders, however, overall the pool profited 1.5% as the combination of liquidation penalties and interest negated these losses.

Since SigUSD was not mintable in this period, arbitrage traders and bots could not easily take advantage of the price.

Off-chain bots also experienced some slow execution due to congestion, if not for these delays it is likely that the liquidations would have been more severe.

While liquidations are a natural part of markets, duckpools needs to do more to highlight when risks are high and provide the community with tools to foster healthy markets. Risk-averse lending is a core principle of duckpools and we do not ever want to see liquidations at a loss to lenders.

What we are doing:
This is why we will be making borrower safety and tools our highest priority for the next few weeks. We aim to achieve the following:
- Add a primitive risk dashboard/ service to highlight potential liquidation cascades
- Add alerts on the borrower dashboard when these risks are higher
- Publish arbitrage bots for community use (and include in these bots the ability to automatically borrow SigUSD from duckpools if SigUSD is not mintable)
- Push out borrower education guides on risk and collateral management
- Model possible future states of duckpools and if necessary create a new vote backed by this data to increase the SigUSD liquidation threshold.

All of these features are planned for duckpools v2 but as we have not yet reached the funding goals for them we will add them to duckpools v1 and retroactively fund them as per the whitepaper.

#cryptocurrency #english #ergo

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07.08.2024

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Noah ( Σ , Σ ) · Accepted Answer

Noah ( Σ , Σ )

Man, i love the duckpools guys so much

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3 месяца назад

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An update on the cascading liquidations that occurred in the

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