That’s exactly what I was going to say. This is the sub prime crisis all over again. When are you guys going to learn.
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I would vote to not do this. Everyone knows this is Crypto. Leverage at your own risk - if you don’t know the risks of leverage and people hunting for liquidations - then I’m amazed you found this project and managed to enter a leverage position in the first place. Protocols can go down/be hacked/congested etc… the market in this case behaved in typical crypto fashion… Keep what you got back and look for another entry place to get back in - it seems the trend is firmly down…
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The problem arises when Sifu baits people into leveraging by implying that the price cannot fall below backing price. If he hadn’t done that, all these people would never have leveraged in the first place.
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You borrowed money you didn’t have = leverage…
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If you got liquidated today you were definitely “over leveraged”. There has been a steady decline in price and increase in risk to your position for the last month at least. For the last few days you have been hovering a 50% drop away from liquidation and not reacted.
Poor risk management should not be rewarded by the treasury.
I say this as someone who learnt by losing some link to aave during the rona crash.
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That’s pretty much leverage, you put collateral to get MIM and use it for whatever you like while keeping your investment.
However if you were liquidated you still have your MIM
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I vote against. Sifu is on record stating the fact that TIME can fall under backing price if there’s enough sell pressure. It’s also clearly been stated in the docs that the buyback mechanism triggers at 1$, the backing price is a manual buy-back. Further, the AVAX congestion issues during this time would have also affected the buy-back process. The losses incurred by leveraged frogs, although sad, are not the responsibility of the majority of frogs who exercised a smaller risk-reward ratio.
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I’m totally for reimbursement. If they say backing is at a certain price, it should be. People take risk based on that. Plus, the crash was instant today. It’s totally unfair.
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Someone posted screenshots were he actually says explicitly that price can go below backing price (which is pretty obvious).
Would love to see the actual messages that people is referring to, but in any case, if you take financial advice from strangers in crypto you don’t go far. DYOR, understand the risks before doing anything, there is no easy and risk free way to make money.
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Temporary isn’t hours and 20% below…
Ultimately even if you didn’t lose out today, you should be in favor of some remuneration as a sign of good faith.
Otherwise how can you trust anything they say they will do w the treasury in the future?
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You still have whatever you took the loan out for. What do you propose that people do about repaying their position? Or should the treasury write that off too?
The treasury doesn’t exist to bail out greedy people. The treasury is there to sustain the project and venture into other avenues to make more money. No one should ever promote irresponsibility; look at where that has gotten the US market.
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Ok, so perhaps some food for thought:
• Sifu did say that they would buy back if the price went below backing price. He also said that there were times when the price could fall below backing and provided some examples. So I take this as “we’ll try to buy back at backing, but there are circumstances that may arise that prevent this from happening”. (ie-manual process, selling faster than they can buy back, etc.)
• Many of the complaints I saw were folks being liquidated due to network congestion or trying to use a DEX with low liquidity. As I see it, none of that should be considered Wonderland’s “fault” as they don’t control the network and they’ve made several announcements/comments on where the liquidity is moved to.
• For those who were frustrated (understandably) with the slowness due to network congestion, there is always the option of just repaying the loan outright from your collateral. You can do it from the repay screen on Abra. While that’s not ideal, it might help save many folks investments if they had just done that.
• While many will say “I wasn’t heavily leveraged/over leveraged because my liquidation price was under the backing price”, I would say that’s a matter of opinion. My opinion differs. This is crypto, and as such, can be extremely volatile. So I keep my leverage very low. I only borrow about 20% so I can both easily pay it back if needed AND have a very low liquidation price. To me, anything over 40% would be extremely risky.
• While I think it would be pretty cool if Dani/Sifu decided to do some kind of compensation for folks who got liquidated below the backing price, I can see many bad things that could come out of it. Like folks not taking responsibility for their actions by leveraging right up to the backing price (which CHANGES), getting liquidated, and then expecting to be made whole again. It’s a nasty circle once it gets started. I don’t envy Dani or Sifu in the decision making they have to do over the next couple of days.
My final comment is that those who feel some kind of “trust” was broken, either didn’t have all the information, so they’re making this determination while missing facts, or they have a different definition of trust than I do. From what I can see, no trust was broken. I see nowhere where anyone lied. I do see where some confusion could come from, especially if one doesn’t have all the details.
And if everyone thinks this is a bunch of crap and I should just F off, that’s okay too. I’m sorry I wasted your time.
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He stated that in a discord chat that nobody saw. Doesn’t really warn us huh.
Backing is different than pegged many many many times in financial history things go below the backing value and those are indeed arbitrage opportunities, it is the natural mechanism of not perfectly efficient markets.
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Good faith? Had the price gone up and you made 10x the profits I would have made, would you act in “good faith” and redistribute?
I’m not in favor of this proposal because I knew that the price could fall below backing. Ignorance is not an excuse, and I’m sorry to sound like an asshole. But wonderland isn’t a trading platform, and it lacks the security you would get such as a stop loss mechanism, etc from proper trading platforms. The risks are apparent. Moreover, providing this type of charity sets a bad precedent that could encourage more 9,9ing, so I’d actually see the failure of this proposal as a success as it would hopefully admonish future leveragers on the risk they’re taking
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I am in favor. I was way under backing. Either way with all the changes coming who knows if it’s worth it to invest more at these prices now.
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Still doesn’t warn us about this VERY important aspect of the backing.