Skip to content
New issue

Have a question about this project? Sign up for a free GitHub account to open an issue and contact its maintainers and the community.

Sign up for GitHub

By clicking “Sign up for GitHub”, you agree to our terms of service and privacy statement. We’ll occasionally send you account related emails.

Already on GitHub? Sign in to your account

Jump to bottom

Cascading liquidation violates whitepaper #48

Open
Sam202120201 opened this issue May 25, 2021 · 9 comments
Open

Cascading liquidation violates whitepaper #48

Sam202120201 opened this issue May 25, 2021 · 9 comments

Comments

@Sam202120201
Copy link

Venus liquidated me 95% on 19th May 2021 in the few minutes of market flash crash (not talking about XVS dump prior to that) , while the white paper says 50%. I need the excess liquidated money back. I need this to be reasonably solved as proof that the protocol cares about its users and doesn't take unfair advantage.

Specific Issue:
I had 141.2749 BNB and 397.7783 XVS in my Venus deposit before the flash crash in markets on 19th May. At the crash time the Binance smart chain was stalled out and there was no chance given to do any form of repayment. I thought 50% liquidation risk is there as per the Venus white paper but then I saw my balance was turned into 13.1846 BNB and 12.3187 XVS in minutes !! That is more than 90% total liquidation and definitely and exploit in the system which unfairly benefits liquidator or Venus itself at the cost if the investor.

This is the liquidiation guide extract on Venus:
"How much do they liquidate us?
They liquidate us enough to pay our loan + 10% on that value that remains of profit for the liquidator.
Do they liquidate our entire guarantee?
No, the liquidator can pay up to a maximum of 50% of the value of the loan, paying us the corresponding value in our deposited currency plus its added 10%."

Othe protocols like Cream finance did not suffer any such serial cascading liquidation. Only Venus.

Please refund me the extra amount liquidated as per the rules and in fairness. I have lost extraordinary money due to this flaw! I am totally shocked and heartbroken and I had such high expectations but now I have faced an unfathomable and unfair loss. A person can claw back from 50% but not from 90%. Please help me and do justice I had great faith in CZ and Joselito and the bsc ecosystem as 'for the people', so this must be investigated.
@whitematrix62
Copy link

whitematrix62 commented May 25, 2021 •
edited
Loading

The introduction of VIP 19 exacerbated the cascading liquidations. The liquidation penalty was increased from 10% to 15%.

@Sam202120201
Copy link
Author

Sam202120201 commented May 25, 2021 via email

@whitematrix62
Copy link

Would love to hear the team justify why the change was required.

@Sam202120201
Copy link
Author

Sam202120201 commented May 25, 2021 via email

@whitematrix62
Copy link

But your loss is probably less than 95% as you did borrow some assets right?

@Sam202120201
Copy link
Author

Sam202120201 commented May 25, 2021 via email

@Sam202120201
Copy link
Author

Sam202120201 commented May 25, 2021 via email

@whitematrix62
Copy link

Sorry to hear that. It is very puzzling why the team would push for vip19. It took more money than necessary out of the protocol, resulting in greater loss for the user and at the same time put the protocol at greater risk of being undercollateralized.

@Sam202120201
Copy link
Author

Sam202120201 commented May 25, 2021 via email

Sign up for free to join this conversation on GitHub. Already have an account? Sign in to comment
Assignees
No one assigned
Labels
None yet
Projects
None yet
Milestone
No milestone
Development

No branches or pull requests
3 participants
@whitematrix62 @Sam202120201 and others