Some updates on our make-good effort announced last month:
A new draft proposal is available for review on Governor Mills that would reduce the collateral factor on loans against assets affected in the April 2, 2022 price manipulation incident, referred to here as “V1 Assets.” The rationale for this is to avoid incurring additional “bad debt” stemming from that incident, which today stands at approximately $8.1 million. This proposal would reduce the collateral factor on those loans (and only those loans) against BTC-v1, wETH-v1, and YFI-v1 from 70% to 50% and would likely, assuming the proposal passes, not be executed for at least five days. Still, for those affected users whose loan-to-value ratio falls above the 50% level, we recommend taking steps now to reduce the value of your loans outstanding against those assets to avoid unwanted liquidations. UPDATE: this proposal has been deleted.
Multiple working groups are drafting additional proposals for accelerating the repayment of this bad debt. One concept currently being studied is a new contract that would offer users with “stuck” V1 assets to convert those assets into an interest-bearing DOLA IOU receipt. Another concept is an early repayment contract, that allows users to instantly free their V1 assets for a premium - this is actually undergoing internal testing now. More news on both of these options soon.
As you may have seen, we executed the first tranche of our repayment plan earlier this month:Inverse Discord, and Twitter for more repayment-related announcements.