Partial return of funds liquidated at 7% premium causing 70% loss of funds
AI summary
This proposal is a request from a user, star4441, who lost $140,000 due to a 7% liquidation premium on the Gearbox protocol's sUSDE-PT strategy. They are asking the DAO to return $56,000, which represents 40% of the funds taken by the liquidation bot. The user cites a recent rule change that allows for a partial refund of the liquidation premium in certain cases, and offers an additional 10% of the returned funds to the DAO.
If passed, the Gearbox DAO treasury would transfer $56,000 to the user star4441. This sets a precedent for the DAO to potentially intervene in future liquidations, which could affect the protocol's reputation for immutability and risk management. The DAO would gain an additional 10% of the returned funds, which is $5,600.
Voting results
🐳 Whale votes
0 votes > 5% VPFull proposal
Dear GEAR DAO Members,
My username is star4441 in Discord and I am a new user to Gearbox and heard about the protocol on Twitter. I decided to invest around 220k in the newly released sUSDE-PT strategy looping with 10x leverage on the Plasma Chain. Within just a few hours, I had been liquidated for 70% of my portfolio due to the extremely high 7% liquidation premium.
Summary of what happened:
Withdrew funds to purchase more sUSDE-PT ( Left 7 days margin in the credit position). Liquidity was very thin on Pendle so as I purchased more, it pushed down the price. Of the 220k principal:
66k (3…