Earlier this month, we reported the voters at DeFi platform Balanced had rejected several “goodwill” proposals to soothe anger resulting from January’s mass liquidations.
Well, in a few hours, voting will begin on another goodwill proposal – a partial return of the liquidation penalty.
Here’s the proposal:
“On Jan 20-24th 174 borrowers got liquidated in exceptional circumstances. Rebalancing progressively increased loans, often locking collateral. During this period 1.53M sICX in penalty fees was added to the emergency reserve. As a sign of goodwill, 1.32M of this liquidated sICX will be returned, scaled linearly (18-25%) from beginning to end. To support non-liquidated borrowers, 100k sICX will be distributed pro-rata. All sICX will come from collected penalty fees.”
More details — including how the numbers were arrived upon — can be read here.
Chiel, the author of the proposal, notes that if passed, the measure would “return valuable assets to valuable community members without taking anything from the DAO or taking any additional funds from the emergency reserve.”
To recap, Balanced experienced a “black swan event” following the big crypto crash in January.
During the event, large liquidations, high-risk positions and a drop in ICX price exasperated Balanced’s reverse rebalancing mechanism.
The result was a spiral of liquidations. Balanced DAO eventually took measures to stop the spiral, but not before 174 accounts and ICX 5,862,934.76 were liquidated.
Over on Twitter, Scott Smiley of Balanced praised the Balanced community for its professionalism and organization:
“Regardless of the details of this upcoming proposal, what was truly impressive was the level of professionalism and organization by many $BALN community members to openly discuss, incorporate feedback, analyze, and execute.
Generally speaking, a great example of a DAO in action.”
On the other hand, if this thread is any indication, some people simply wonder when the drama surrounding January’s incident will end.
