Raising an emergency fund to bailout the liquidity crisis

Proposal ID
6FkhxfJjw6dfzbq9TCmSdHyo9ystpUzDchsFBsY3gTpi

The only logical way to solve this situation is for Waves/Vires team to lead a fundraiser, by seeking external funding and/or use their treasaury and commit capital to solve the liquidity crisis

Vires/Waves team should do the right thing and raise an emergency fund to :

  • Diversify the collateral backing of USDN (e.g. adding BTC/ETH)

  • Solve the liquidity crisis on the platform by providing new USDC/T (which would then collect the borrowers interests, so a team having confidence in it’s own product should benefit from this.)

The current state of affair will only lead to full loss of confidence by any depositors and users (which already took a big toll with the recent events). If you do care about the long term prospect of Waves/Vires there is only one real way out.

See how Jump Trading handled the resolution of the 300m wormhole exploit and could restore full confidence in it’s ecosystem in the article below :

Here is how Binance bailed out the 600m exploit or Ronin chain :

Transaction Payload

{
  "type": 12,
  "version": 2,
  "data": [
    {
      "key": "gVote",
      "type": "string",
      "value": "Raising an emergency fund to bailout the liquidity crisis"
    }
  ],
  "senderPublicKey": "3gQ8QUfoGQW6YVuhUv3zuqsbmxbV5F2FAuDXJqVKD6C9",
  "fee": 100000,
  "feeAssetId": "WAVES",
  "timestamp": 1650742647083
}

It’s the waves team that created this mess by borrowing hundred of millions. If they return this the problem is solved

But instead they’re changing the rules

3 Likes

As this has nothing to do with Vires parameters (which is what gVires lets you vote on), this proposal is pointless.

I don’t think what we can control with the vote here… unless we control with our votes the treasury decision and how do they raise funds. I think this is more of a hope than a real proposal

That said, I don’t think we should add Eth, let’s add only BTC :slight_smile:

For me it is a no-brainer and I did put my vote on this, but what if the liquidity bandits just carry on with their game? How many half a billion $ bailouts do we have in mind? I guess PEG protection should be secured independently of platform prices or liquidity.

This proposal has no sense. It doesn’t vote at all about vires, so even positive result with not yield any effect. It was made by someone that does not understand how ecosystem works.

First, USDN backing corresponds to neutrino protocol DAO, not vires. And second, you cannot force anyone to pay a bailout through a vote.

And last but not least, it doesn’t even target the cause of the current vires issue, which was a sharp squeeze of deposits, not sharp increase of borrows.

As you can see here, these two are one.

No, you are wrong. There was no sharp increase of borrows. Borrows grew progressively, and that is OK.This is a lending platform. The sharp movement was in the side of supply, thus leaving exposed to high rates those with borrows. And that can be easily tracked.

usdt

Also, sharp increase of borrows are difficult to happen, because that action immediately affects what the borrower itself will pay in interests, thus exposing himself to high rates. But there is no deterrent on suppliers to reduce sharply their deposits and leave borrowers exposed.

2 Likes

Thanks for taking time to clarify that. Indeed the protocol should deter such a conditions. Supply minus Borrow margin should always pose an adequate protection buffer.

Nevertheless, risk has to be mitigated and this is what the proposal raises a flag for. It’s not my own, but I do support the thesis that action must be taken in a time sensitive manner. Of course no one can force anybody to deposit and there is no code in this proposal to enforce any change, it is just a communication to put things in a perspective.

1 Like