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New BSIP: per-position force-settlement volume (percentage) limit #261

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abitmore opened this issue Feb 4, 2020 · 0 comments
Open

New BSIP: per-position force-settlement volume (percentage) limit #261

abitmore opened this issue Feb 4, 2020 · 0 comments
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abitmore commented Feb 4, 2020

BSIP38 introduced the target collateral ratio (abbr. TCR) option so that debt position owners can decide how much collateral to sell when being margin called. However, the TCR option doesn't affect force-settlements. When being force-settled, the debt position with the least collateral ratio (abbr. CR) will buy as much debt asset as possible (capped by its total debt) to fill the matched force-settlement order.

Some debt position holders may also like to sell as little collateral as possible when being force-settled. Since a debt position's CR would raise after sold some collateral, it's possible that the position's new CR would be higher than other positions', thus it's fair for this position to not sell more collateral.

The new options could include

  • a per-asset default_per_position_force_settlement_percentage option that can be defined by asset owners, floored by the maximum_force_settlement_volume percentage, and
  • a per-position force_settlement_percentage option that can be defined by debt position owners, floored by the corresponding asset's default_per_position_force_settlement_percentage option.

When executing (filling) a force-settlement, let the debt position with the least CR buy up to force_settlement_percentage of its total debt from the settle order, then reevaluate the debt position list and loop.

This would bring better experience for debtors.

Note: the design is incomplete, there are edge cases to consider to avoid infinity loop and for better performance.

@abitmore abitmore added the MPA label Feb 13, 2020
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