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RE: Onchain Lending System: hive governance discussions
@gtg75
(edited)We don't want to touch L1 (K.I.S.S.) and aside from that there are more serious issues in this idea.
In lending protocols like MakerDAO liquidated collateral is auctioned off to cover the outstanding debt. The stablecoin gets burned in the process. The system stays solvent.
Here, the proposal says liquidated HIVE is destroyed. But the borrowed HBD is already out in circulation.
Nobody burns it back.
So:
- User locks $100 of HIVE, borrows $80 HBD
- HIVE drops 25%, collateral now worth $75 -> liquidation
- HIVE is burned. But $80 of HBD is still out there, unbacked
- Hive absorbs the loss
That doesn't sound what the way to go, re HBD peg.
The general idea is OK-ish, just the path to it is IMHO wrong.
0.00000000 BEE
I understand the don't touch the L1 point. But in the case user locks $100 worth of Hive and borrow 80 HBD it will be liquidated when Hive just make a 10 or 12% of value (from 100 to 90 or 88 [80+10% or 12% of interest]).
The Blockchain don't take the loss because it's like if the user do the convertion on-chain but paying a 10% more.
Thanks for share your thoughts on this.
!BBH
But it's not as user do the conversion, do the simulation at the large scale when price crashes and triggers the platform-wide liquidation event.
No one has the skills to refactor the L1. It's not KISS, it's bloated. It's a fork of a fork (bitshares -> steem -> hive).
Who is 'We' ?