I do agree with the argument that was made here about why the full position is most fair (it helps the users who bought at a low entry price with low leverage), but I think it’s simplest to just focus on restoring the margin.
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Agreed, keeping it simple should be the way to start this. A convoluted full compensation proposal is harder to agree on and will likely get voted against.
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We could do two votes.
Vote 1: Compensation Yes/No
Vote 2: How is compensation executed? (full vs margin)
As an aside, I’m super impressed with the level of discussion here. Everyone is so knowledgeable, sophisticated, and the discussion quality is extremely high.
I have read personal stories that were very well articulated, and people have such great attitudes. Thank you all for sharing.
@Laius Thank you for enlightening me on the intricacies of Margin and Unrealized profit. At first I only supported marking, but you convinced me by your arguments around arbitrarily picking winners and losers. I now think UP should be considered.
@nugget and AJK bring up an excellent point of the community treasury of $550M being a superior option.
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I think the increased complexity could decrease voter support and participation. I’m also still not sure how we’d decide on a way to calculate the UP. I’ll wait to see what @Laius says.
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I think things start to get quite complicated if you have multiple votes - somebody may think some compensation is fair but would have rather voted for no compensation vs full compensation.
I think we should have a think about what compensation would be the most fair and then have a vote with the two outcomes (no compensation vs compensation)
In terms of margin vs margin+upnl, it doesn’t feel right to compensate the full amount as the profit was unrealised. upnl is also quite difficult to calculate (what price do you use to calculate the profit??).
Having said that, there will be users who had maintained their position with upnl similar to what @Laius was describing. These users (with low margin and high upnl) will feel unfairly treated.
@tongnk has mentioned that margin only compensation would be roughly 1.7m usd
If we wanted to take the margin+upnl route we would need to decide 1. how to calculate upnl 2. figure out what the cost of compensation would be and then 3. decide which vote to propose.
My gut feeling is that margin+upnl may require a much larger compensation (so in that case I think it would make sense scaling it down)
Some good thoughts already here!
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Also, as an aside: I think this event has given us a lot of exposure with people that haven’t heard of perp (people have been talking about it on twitter, etc). It is possible that people may look at the outcome of this vote and then decide to start using perp.
To that extent, I think it’s imperative that the early protocol users are supported (in the form of compensation) rather than penalised. It looks like the team have been working hard on implementing some fixes and changes to avoid this sort of event from happening again. I see this as a catalyst for us growing.
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There MUST be two separate votes, it is the only possible way.
Vote 1: compensate yes or no
Vote 2: compensate margin or pnl
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If we include unrealized pnl, the total restoration price won’t necessarily be greater. There could’ve been quite a few people who were over leveraged with high entry prices and in the red right before the crash occurred. For that reason, I agree that it would be ideal to account for unrealized pnl, but the problem is that it’s too hard to agree on how to do that. I think having one vote to restore margin accounts is simpler and will get more support. I think we should try and move ahead with a vote as soon as possible too - ideally before the end of the weekend.
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I’ve only moved my fund onto Perpetual Protocol for two weeks. I thought it was a promising platform with low fee, only to experience this ridiculous divergent of price during the flash crash. I was trading at low leverage, and my liquidation price was ~$1400. During the crash, I was there the whole time waiting for my funds to be deposited to prevent liquidation, but the transaction never passed the xDai validation step. I literally watched my position being liquidated before my own eye. I have friends and relatives who were eager to give this platform a try, but they are now all scared due to this event. I believe having any form of compensation would greatly help rebuild the confidence that Perpetual Protocol is indeed a reliable platform.
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Again, if we do this we need a method to determine what pnl actually is. How do you actually calculate this?
Until the community resolves this point as well as what the voting options should be, we can’t really proceed with a vote
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@icecheese let’s just focus on ensuring that we restore the margin accounts for now. If you want, we can try to get another vote together in the future to restore unrealized profits. I think it’s important that we vote as soon as possible, and this is the path of least resistance.
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Agreed, let’s move forward with the “margin only compensation” option, the UP can be considered later as a separate vote. Don’t want to drag out this discussion for much longer.
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Also agree with proceeding with a vote now for margin compensation only
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It looks like the optimal way to proceed from here is with a yes/no vote on restoring margin accounts with vested PERP (with the same vesting period as the solution to the first crash: 1/2 vested for 3 months, 1/2 vested for 6 months). In the future, people may propose a second vote to restore unrealized profits - but they’ll have to clearly define how that is calculated in this context. The longer we wait, the longer the stress of this situation lingers over everyone.
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Well, based on the current vote results, it’s clear that the biggest stakers in perpetual protocol could really care less about its users and its future. Good luck to you all.
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I won’t be back. fuck this project.
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