You do understand how the system works right? It was a technical glitch affecting borrowers who are using a decentralized platform that has inherent risks, including the risk of faulty price feeds.
There is no ‘returning funds to users that got robbed’ since nobody got robbed and there’s no funds to return. Do you understand here is NO compensation scheme for technical issues?
People are suggesting selling $9M of community owned ANC reserves which devalues the ANC token and passes the loss onto savers, LP providers of the ANC token.
There is nothing in the documentation to suggest ANC tokens will be used for compensation. Why should ANC holders pay for those who took risks?
I am in favour of discussing a compensation solution to this issue once we have a technical resolution. But not at the expense of other users within the platform.
No sarcasm intended but what would the disclaimer say? “In the event our oracle’s data is inaccurate your funds maybe be irrevocably liquidated. Participate at your own risk.”
Something similar yes. Perhaps also providing historic data to provide information about previous events so users can weigh up the risks.
The alternative is to sweep this under the rug, pay out compensation to users (not sure where from) and pray it doesn’t happen again.
I would be most interested to see the outcome of the investigation on the Oracle data so we can assess how likely this issue could happen again. Also what fixes / monitoring are being put in place.
Also we could redirect users into Nexus who can manage the risk profile or offer something similar directly in Anchor? Then again, the legit liquidations are part of the Anchor revenue stream.
I for one think the focus of this proposal and discussion by the ANC is misguided. We all feel bad for those impacted by the Jan 9 bug, however ANC holders should not set the precedent of compensating users for a bug on the protocol. ANC treasury reserves are not an insurance policies and should not be used as such. We should be focusing on how to make the platform better, and in my opinion that would mean a focus on how to make the liquidation price feeds better. We should look to use decentralized price mechanisms to obtain price data on the protocol. I think we should move immediately to add price feeds from Band protocol and Chainlink. We could use treasury funds to pay for this price data or impose a small fee on transactions done on the Anchor protocol to cover this expense. Such a measure I am sure would have wide community support.
As for compensation of those who were impacted by this bug; 1) Those in favor improperly assume the price will remain above $3.00 should they decide to sell ANC treasury funds…this is not the case such sale pressure will drive down the spot price of ANC significantly 2) Bugs(Bad price feeds) are common place in Defi and Cefi and should be a known risk by anyone using leveraged loans 3) ANC savers should not be the insurance policy of those taking risk with leverage…for these reason and others I am a No vote on this proposal. I do want to make the protocol better and that is why I advocate the immediate implementation of decentralized blockchain based price oracle feeds from Band and Link to lessen the possibility that this occurs in the future!!!
I think they should get reimbursed for the Oracle error. I am wanting to borrow but am too scared to loose my Luna. It looks like most people voted “YES” yet it shows only 1% vote for yes which seems very odd.
heres an idea…let make a proposal to make a pool where people who advocate reimbursement can voluntarily donate Luna to a compensation pool…donations can be made by community members and once the 45million in Luna is collected the funds are provided to affected users. That way those that want to reimburse users can and those that are opposed can abstain. I dont really think this is feasible as people morals and positions are strong as long as they perceive that the sacrifice being solicited does not impact them directly. If ya feel strongly that these users should be compensated then put YOUR money where your mouth is not the money of the person who purchased 24 million ANC or the other ANC holders.
It seems to me all paths lead to the same result no matter the choice and the consequences are basically the same.
Option 1: If Yield Reserve is used for compensation it would increase the chance ANC can’t meet the 20% APY paid to Deposits. ANC price will crash as people will take their money and go elsewhere.
Option 2: If ANC is used for compensation the price of ANC will crash in the short term causing inflation of ANC because the Distribution APY paid to borrowers is calculated in reference to UST. The reserve will have to be used to bring the price of Anchor back up to reduce inflation.
Option 3: If borrowers are not compensated they will leave the platform. The Distribution APY will have to be increased again to attract new collateral causing the same inflation. The reserve will have to be used to bring the price of ANC back up to reduce inflation.
Similar to a plane crash that relies on GPS coordinates (Terra Price Oracle being the GPS), an error would cause the plane to crash, as well as the stock price of the airline.
We all assumed the price feed was accurate but it wasn’t. Now the plane has crashed and 242 people are dead. The stock price is going to crash no matter what.
To bring the stock price back up we have to compensate, and more importantly we must implement redundancy.
Let’s not forget crypto is anti-fragile and this will make us stronger in the long term.
Do said in his twitter space that Anchor governance had no governance over the ozone reserve. I think the powers that be don’t want a precedent to be set with protocols passing proposals on the usage of another protocol’s reserve.
I’m following this very closely as I think we can all agree that’s the toughest topic our community has had to deal with.
Others have summarized our options well, so I will not reiterate but instead propose we explore a potential solution to the conundrum that refunding/crashing anc vs not refunding/hurting confidence in anchor offers, and the precedents both of these options set.
Many have stated that ANC is not meant to be used to compensate users from technical failures according to the doc. MARS, on the other hand, is. Stakers will underwrite the risk of the protocol in exchange for a share of its revenue. I believe this is a solid model, which is be worth paying attention to, and maybe eventually adapt to Anchor.
In short, should we collectively decide to make affected users whole using ANC, we could also engage in the process of revamping the tokenomics to reflect the fact that stakeholders of ANC are already de facto underwriting the protocol’s risk, and to compensate them accordingly.
If we announce this intention clearly, present the refund as exceptional due to the current absence of an underwriting mechanism and set out to build a robust framework for risk management, then we can avoid locking ourselves into unsustainable promises while minimizing the loss of confidence.
As always, happy to read your feedback on this, cheers everyone.
Your vote is worthless if one entity controls 24% of the governance. That’s called an autocracy lol… Just the fact this guy voted breaks governance tbh. Not really concerned about the whole what we are voting on. Just that one guy can basically vote for all reserves to go to his wallet and make a run for it. Because governance is broken right now. Because he controls the votes.
I don’t care about the outcome of this vote. I am concerned that one guy can essentially break government by voting for proposals of his choice and control the entire protocol.
Governance is not broken!!! This system is where one token = one vote and you are free to buy as many votes as you want. Majority does not and should not rule…those with the most stake (most money on the line) rule. If you want a bigger say buy more ANC. To say the system is broken because someone decided to buy 24 million ANC is wrong…everyone is free to acquire as many ANC as they wish/afford. We only hear this ridiculous argument when a large stake holder votes against the wishes of the majority of users…but all users arent equal and I believe this is a virtue not a flaw. A guy with 1 ANC or 3 dollars should not have an equal voice with someone with 24 million ANC. No one complained when this guy pushed the price to 3+ dollars with his purchases but when he chooses to vote now you want to hoot and hollar about ‘centralization’. You want more say put your money where your mouth is and buy more ANC to increase your voice…but quit asking or wishing for people to vote against their own self interest. If you held 24 million ANC you too would not vote for a proposal that would significantly degrade the price of ANC
TFL built the Anchor platform, but not did not design a compensation process for technical issues.
If we want to use ANC tokens for future technical issues then let’s build that process into the protocol documentation. Stakers and investors can at least make an informed decision (regarding their ANC holdings) and be aware they are collectively responsible for compensation.
On this basis, I am suggesting that TFL dig into their coffers and make the 240 users whole on this occasion. We can swiftly move on from this with an Anchor owned solution going forward.
The alternative is no compensation and we make sure we have clear risk disclaimers on the site.
Or we could cap the amount of ANC that can be used for voting? Because having one person with 24% of governance control is fundamentally broken governance? It’s really not that hard to understand. The cap can be 1M anc per vote for all I care but it should be capped to allow for proportional representation not gaming the system with wealth.
I was one of the unlucky few who were liquidated in this event. Had 1000 Luna with liquidation price set around $58.5 and ended up with 691 Luna. The current price was $66 when my 309 got sold off for around $50.
Some things that have been going through my head.
How would response from community differ if this glitch liquidated the majority or even all of those who have a borrow out on anchor protocol?
With price climbing by the day, will I get full damages refunded as Do had alluded to on Twitter spaces. Personally I would like the collateralized asset sold off to be refunded vs anchor or UST.
Maybe a liquidation time delay would be helpful in the future. Surely a few hour window to pay off loan prior to a liquidation would have helped at least mitigate the ensuing damages from the oracle glitch.
This really sucks. Thank you thank you thank you to all for coming together to help fix / prevent this issue.
How can you use ‘integrity in the protocol’ when users were liquidated via faulty oracle. That is a process/decision error made directly by the anchor protocol, as they choose who provides their data.
Perhaps, we run liability up the chain to the data provider? Regardless, this one shouldn’t be ‘on the consumer’.
To say that users who use the platform should be understanding that their positions could be liquidated at any given moment, for absolutely any reason, is not a good precedent to set. In a world where risk is rampant, anchor could collectively choose to show support and ‘own’ this one.
Why would any user, old or new, use the platform morning forward, when the rules could change at anytime. That is not good for business.