One of ICON’s leading DeFi platforms has commenced voting on proposals to “increase goodwill” after the January market crash led to mass liquidations.
Balanced has posted the seven proposals here. They are:
- Return 1/4 of the liquidated sICX and distribute 100k BALN to non-liquidated borrowers
- Distribute 30% of the sICX and 15% of the BALN held in the reserve fund to ALL borrowers
- Return 35% of seized collateral to liquidated borrowers, and distribute 800k BALN to all borrowers
- Return 18% of the liquidated sICX to align the liquidation rate with BIP18
- Don’t return any funds in the reserve fund to anyone
- Distribute all the sICX in the reserve fund to all borrowers between Jan 20 and Jan 24
- Distribute sICX to liquidated borrowers, double BALN for borrowers for 3 months, & reduce loan fee.
All proposals were written by Balanced community members after a lengthy forum discussion.
The vote will last five days. The proposal with the most support from $BALN holders will be submitted to an on-chain vote.
“If approved (and required), the community devs will be ready with a claiming solution,” tweeted Balanced.
Scott Smiley of Balanced wrote:
“While this has been a difficult time for the Balanced community, I’ve been impressed with the level of professionalism, respect and critical thinking displayed by many community members. This has been an opportunity for people within the community to step up, and they have.
From here, I’m as confident as ever that the platform will continue to innovate. More and more strong community members are stepping up, and I look forward to seeing the evolution of the Balanced DAO.”
Black swan event
The vote on goodwill measures comes after Balanced suffered a storm of liquidations late last month.
From Balanced’s official post-mortem:
“Over the weekend, Balanced experienced a situation caused by a combination of large liquidations, high-risk positions, and a drop in ICX price, all exacerbated by reverse rebalancing mechanics. It was a black swan event created by a perfect storm of circumstances.”
According to Balanced, the liquidation of one large account triggered a spiral of liquidations.
Ultimately, 174 accounts and ICX 5,862,934.76 were liquidated before Balanced’s DAO could take measures to stop the spiral.
If you need a refresher on Balanced’s rebalancing mechanism, check out this Twitter thread by digitaldave.eth.
Lastly, Brian Li offered some very thought-provoking commentary on the Balanced liquidations in a two-part mega-thread posted immediately after the event:
Regardless of how you feel about Brian’s take on rebalancing, you can’t disagree with this sage piece of advice:
“The past 48 hours on Balanced has shown why it’s important to understand how a DeFi platform works before using it. From all the recent chatter, it’s clear that many people did not understand Balanced before putting their money in.In the future, always read the docs, read them again, and then ask questions if you’re unsure about something.”
