I would agree with you if the rule of the game would be clear an not only speculation
I just think that spontaneously introducing large fees could cause some to lose trust in the platform and be fairly expensive if gone unnoticed, even if the period doesn’t last long enough to liquidate them. Not everyone will be actively managing their position especially if they’re just lending and borrowing the same asset with no chance of liquidation otherwise.
I’ve not been present for the discord discussions to know if this has already been discussed, but in my opinion the most fair solution would be to reward those who supplied the sICX to begin with since it is their collateral. If I was renting physical property to someone and that property became eligible for an upgrade I would expect to profit from that rather than the person renting it from me, so imo that should be the case with digital property too.
I understand that this is incredibly complicated and likely not possible considering the possibility for funds to have been borrowed and taken out of the platform.
But, if it was possible to subtract the total sICX borrows from the total sICX supplies of each address we’d get the initial collateral balance for each address. This would make sICX borrows and sICX collateral that originated from borrowing ineligible.
So, if someone supplies 10k, borrows 7.5k, supplies 7.5k their total supplies - total borrows = 10k which is correct.
If they don’t resupply the 7.5k and either hold it in their wallet or sell it, their allocation of ICE from OMM is 2.5k and still correct and it’s up to them to make sure their other sICX is eligible for the ICE airdrop.
Pretty sure up to this point would be possible through on chain analytics.
The issue that I’m struggling to get past is what happens to sICX that is borrowed from a different collateral source.
Is the sICX that omm uses a balanced product or does omm have it’s own ICX staking pool and is able to mint sICX? I’m assuming that the pool will be airdropped the ICE and it has to be distributed by the owner of the pool, whether that’s omm or balanced, to sICX holders.
This is probably too complicated and likely too much work if it’s even possible, but if I assume that sICX is a balanced product and they receive all of the ICE for the sICX pool, would they not be able to do that initial calculation for addresses that borrowed sICX from sICX collateral, and ‘blacklist’ the sICX borrows from non sICX collateral that has left the omm platform?
1.) Disable sICX borrow (no one will be able to borrow sICX anymore)
2.) Remove OMM rewards for sICX borrow (OMM rewards will be shifted to sICX supply)
I support both
I think you guys should exclude this part from the proposal : Increase sICX borrow rates to 120%
It will surely lead to liquidation for so many people and its just unfair
Please do not Increase sICX borrow rates to 120% , it is not fair. And I don’t see how this will help the process. Just stop giving loans for a while until after the snapshot . Please don’t increase the rates
We actually thoughts about this approach as well, but what if User A, who deposited stable coin and took out sICX loan, traded their sICX on Balanced into stable coin again. User B who traded from stable coin to sICX now has blacklisted sICX - it probably wouldn’t be fair for this User B to not receive ICE because he unknowingly purchased blacklisted sICX on Balanced. In addition, if User A provided sICX on Balanced as liquidity, then everyone else who is providing liquidity or trading on Balanced now may be at a risk of having some blacklisted sICX. It becomes impossible to track at this point. We definitely appreciate these new ideas as we would also prefer a proposal that is less controversial, but above proposals were best we could come up so far.
Please check out the previous comment on potential liquidation scenarios:
“As mentioned above, actual possibility of liquidation from these changes are on the lower end if you are simply supplying and borrowing ICX. It takes up to 3 months to get liquidated. If the community thinks 120% is too high, lower number can be discussed as well here.”
What do you think is the appropriate interest rates to encourage users to return sICX back to the protocol then? If there is no change in interest rates, users who already borrowed sICX are less incentivized to return their sICX back soon (as they are only paying ~1%/yr for interests), and thus ICX depositors have less chance of getting close to 1 ICE per 1 ICX deposit.
My liquidation risk is at 40%now , if the Apr will be increased to 120% , what will my liquidation risk be then ? And honestly I think most people are waiting for the ICE airdrop in order to pay for their borrowings with it , that is what I’d do
Also , I’m not sure if I get this right , what is blacklisted sICX? Do we not get the airdrop if we have sICX ? Is it only for ICX holders ?
Yes, and the current proposal is to prevent those actions. The governance vote will show whether the Omm community thinks it is better to cater towards ICX depositors, who want to receive close to the full amount of ICE vs. sICX borrowers, who can take advantage of Omm protocol to receive additional ICE.
In terms of liquidations, if you only supplied sICX and borrowed sICX, and are currently at 40% risk, your risk needs to get to 100% to get liquidated. As a result, it would take at least more than 9 months of not doing anything to get liquidated.
No I was just giving an example to @gollymashed above on why blacklisting method wouldn’t work. There isn’t such thing as blacklisted sICX
If borrowers are not able to benefit from the fruits of the asset they are borrowing (and giving consideration to borrow, just as suppliers are getting consideration), Option 1: work with Balanced to sort a way to delineate borrowed sICX from non. If not possible, Option 2: let the ICE flow to borrower and update the loan terms to include ICE distribution in the loan settlement and/or terms to immediately return the ICE or face the loan being called within N days. Borrowers would have to send the ICE to an (OMM controlled) pool account and pool owner would have to re-distribute back to suppliers in accordance with supply.
Would be good to hear from those borrowing sICX on their views and preferred approach. My concern with the current proposal is that we disrupt OMM’s core offering: 1. Stop borrowing, 2. Stop earning, 3. Destroy confidence with escalated interest rates.
I really like the way you’ve said it and completely agree.
There should be other ways to differentiate borrowed sicx from nonborowed
I personally have borrowed sicx and placed a good amount of sICX as collateral. From what I understand I won’t get ICE airdrop for the sICX and I don’t think is fair. I cannot afford to pay the loan in full now in order to change everything back to ICE , therefore I ask the team to find a solution and distribute ICE equally for everyone and find a way to differentiate borrowed sICX from nonBorrowed and this way they won’t have to worry about people taking advantage of the borrowing in order to get ICE
Unfortunately, we have talked to Balanced team and there is no way to differentiate sICX from Omm and sICX already on Balanced.
Unfortunately, there doesn’t seem to be a solution that satisfies everyone at this point, so OMM stakers will voice their opinion through a vote. Just to be clear, you can still borrow stable coins, earn OMM by borrowing other assets. Interest rates is actually a variable interest rate and can fluctuate quite a bit if utilization rate becomes high (200%+), so borrowers should always keep their eyes on borrowed balance in general.
Any timeline for when on chain governance will be enacted so we can push this vote through?
Hopefully some time this week!
What would the vote be about ? What are the choices?