Suggestion: Halt liquidations on cLend loans until the platform is launched

Suggestion: Halt liquidations on cLend loans until the platform is launched.

Main area of impact: Fees and Treasury.

Background and crude introductionary reflection:

There have already been liquidations for several hundred thousand $. I have been liquidated myself as well, as I took a three months break from crypto, lol.

A great member of the community, Dudeman is about to have 1 million CoreDAO liquidated, and I think this is a shame as Dudeman has been a rock-solid positive member of the CoreVerse community for as long as I can remember. He even supplied liquidity on rLP for a while. So for me, it feels a bit harsh that he should get such a high amount liquidated. Sure he has taken out a loan on them and lost out enough on other placements so that he is unable to pay back the accrued interest before it liquidates.

In my opinion, the last few months of crypto have had a near-perfect storm with one black swan event after the other, albeit there wore writings on the wall before both the Luna/UST implosion, 3AC collapsing, and the contagion to the rest of the crypto sphere going forward, it has still been easy to get caught in the downfall.

When you pair this up with the fact that there for several months has been almost no liquidity in the rLP DEX pools for selling rLP’s, and there is now very little CoreDAO liquidity as well; at the time of writing this, I can not buy more than around 14,000 CoreDAO.

There are only two ways to interact with your lending position on cLend, either pay back the accrued interests in full or add more collateral in the form of CoreDAO or CORE. You can not do a partial downpayment on the accrued interest.

This makes it much harder for big positions to keep their loan healthy in the times we are in.

I fully get that it isn’t the ecosystem’s responsibility that investors make in hindsight, bad investment decisions, but I feel it is a bit harsh that longstanding loyal investors and ambassadors get punished severely before the platform is even released.

I also get that the ecosystem needs a way to ensure that investors do not take out perpetually free loans and to have an automated solution to purge them from the system. But I do hope there is a way we can ensure that going forward; investors get a fighting chance to make their dues after the platform has been launched.

My suggestion could be one of the following:

  • Freeze accruing of interests on cLend until the platform is released.

  • Increase the liquidation threshold from today’s 110%, which occurs after six months at a 100% loan, up to a rate that gives, for example, 12 or 18 months in total that, should give enough time that either the bear has given some room for bull, or the platform is launched, or hopefully both of the above. Doing it this way ensures that the platform can still accrue income in terms of interest, but it gives the lenders more leeway.

  • Offer loans on rLP to give investors that are exposed to both parts of the CORE ecosystem more room to move. I will address this in a separate suggestion.

  • Add the possibility to do partial repayments on accrued interests using DAI, as that will somewhat improve it a little since CoreDAO liquidity is almost dry, and CORE fluctuates a lot in price.

I have no idea how much development work is needed for the different options I suggest, and I mean absolutely no disrespect to the developers, I have nothing but respect for them, and I am like a giddy kid waiting to see their vision come to fruition in 48 hours.

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The suggestion with offering loan on rLP will be published in 23 hours, as since I am a new user on this forum, I am being restricted after quickly posting 3 new threads. :smiley: