Author Topic: 2022-01-22 bitCNY blackswan: issues and solutions about individual settlements  (Read 1741 times)

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This is a translation of the original Chinese post (https://bitsharestalk.org/index.php?topic=33632.msg347867#msg347867).

On January 22, 2022, the market price of BTS fell, triggering the bitCNY black swan event, and the insolvent debt positions were independently liquidated to the fund pool.

As of the time of publication, the total collateral in the independent liquidation fund pool is 43,755,308.66640 BTS (more than 43 million), and the corresponding debt is 6,257,567.7942 bitCNY (more than 6 million).
The average liquidation price is about 0.143 bitCNY/BTS. The BTS in the pool can be obtained instantly by force-settling bitCNY.

While the price of BTS continued to fall, some insolvent debt positions were not automatically liquidated, which was confirmed as a code BUG after inspection.
At the same time, due to the existence of these unliquidated debt positions, most debt position adjustment operations cannot be completed, no borrowing, no increase or decrease in collateral, and no partial repayment, only full repayment to close the debt position. (It may also be the case that limit orders cannot be matched or filled normally, to be verified)
For a detailed analysis of the problem, see Github issue: https://github.com/bitshares/bitshares-core/issues/2582 .

In response to this problem, the Committee performed a temporary adjustment of the bitCNY parameters at the block height of 65663048, triggering the independent liquidation of the insolvent debt position, allowing the debt position adjustment function to be temporarily restored. The specific parameter adjustment is as follows: first adjust the MCR to 1.599, and then adjust it back to 1.6. Other parameters remain unchanged. The adjustment has no impact on other debt positions.

However, the bug still exists, and if the price of BTS continues to fall, resulting in new insolvent debt positions, the same problem will still occur.
This issue may not be fully fixed until the next major version upgrade (hard fork).

Before the problem is fixed, the Committee's temporary response plan is:
* Regularly adjust the bitCNY parameters to trigger independent liquidation in time
* Currently it is tentatively scheduled to be triggered every 10 minutes, and the time is 5 minutes, 15 minutes, 25 minutes, 35 minutes, 45 minutes, and 55 minutes of each hour. It may be adjusted according to the actual situation in the future.
* The implementation method is to send proposals in batches in advance and complete the approval to ensure that they can be executed regularly. All operations can be verified on chain by checking the committee-account.
* After each independent liquidation is triggered, until a new insolvent debt position appears, the debt position adjustment operation can be carried out normally. Please act in time for accounts that need to adjust their debt positions.
* When the feed price is much higher than the black swan price, the adjustment operation will be suspended because it is unlikely to trigger independent liquidation.

Please be advised that the above.
« Last Edit: January 23, 2022, 12:17:13 am by abit »
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