+1 Reduce the slashing
+1 Increasing the minimum collateral
I do not agree... Even 10% premium is not a lot to cover all the hassle and transactions costs.
If the proposal is accepted, I could easily see many vaults being less careful and endangering the overall stability of iBTC. It would risk a depegging, and that would be terrible.
I do agree with asking for higher collateral -- if you want to play, play on kintsugi. Interlay is for the big boys (cough)
I'm in part agree.
Reducing the punishments will be better for vault and can be attractive for new vault owner. But I think 2% is too low to ensure vault engagement and bridged bitcoin security. Perhaps it could be a good option to set it to 5%.
In this case it's possible to set liquidation threshold to 110%. It ensure 5% min for liquidators, cause I think 3% could be dangerous for security, it's not so attractive for liquidators and if they don't do rapidly liquidation job bitcoin ratio could move to far to be guaranted by liquidation ratio. If liquidation threshold is set to 110%, we have to set Premium Redeem Threshold to 120%, don't care about secure threshold, it's could be change by the vault owner.
So in this case premium redeem and punishment will have the same cost => 5%, I think it's easier for vault owner to project what are the risk for owning vault.
I am completely in favor.
This makes a lot of sense.
Just want to double-check one thing:
We often-times talked about the volume of the premium redeem and how the premium should not be based on the full collateral of the vault but capped at the amount required to get back from "below premium redeem threshold" to "safe collateral threshold".
Is this plan cancelled with the updated numbers in here?
a vault that got liquidated because it did not process a redeem request
Please review wording here as the vault did not get liquidated, only slashed.
As for the meat of the proposal, I agree with the above. EIther the minimum collateral or the slashing % is too low. A 1500 USDT vault will have $1000 of bitcoin. A 2% premium will only net a redeemer $20, which could very well be lower than the bitcoin transaction fee at the time.
I'm generally in favour (despite operating a small vault that will be affected by this change), but I worry about this clarification by dom on Discord. Copying it in here for clarity:
- For existing vaults, you can continue to operate the vault
- When adding/withdrawing collateral, the chain checks that the vault either withdraws all or deposits such that it is above the minimum collateral
The ability to draw down collatoral in tranches when taking the vault offline would be very important to me (among other things to reduce risk when moving to a new vault). Any chance that this proposal can be amended to support gradual collateral withdrawal when below the threshold?
Hmm, 2% is definitely too low.