messari
MakerDAO Ethereum: Counting liquidations as negative protocol revenue
Tracking this on GH @tnkrxyz, but going to add to backlog for now. We re-prioritize it later
ACTION: Do we want to inherit this methodology in our subgraph. If yes, we do the work and update our methodology. If no, we make a note in the README and close the issue.
- What is the current methodology @tnkrxyz ?
- And what cases would we see this?
- How likely is it to have negative daily revenues?
- @ishraq8 as the PS for lending, do you have any opinions on this?
ACTION: Do we want to inherit this methodology in our subgraph. If yes, we do the work and update our methodology. If no, we make a note in the README and close the issue.
- What is the current methodology @tnkrxyz ?
Right now we are using the method documented in README.md Liquidations per market * liquidation penalty per market for liquidation revenue to the protocol side.
- And what cases would we see this?
This happens in rare cases when the collateral sold for price below the loan value + liquidiation penalty (this happened at large scale at least twice I can remember:
https://blog.makerdao.com/the-market-collapse-of-march-12-2020-how-it-impacted-makerdao/ https://thedefiant.io/makerdao-liquidations-bad-debt
In those cases, instead of receiving a liquidation revenue, the protocol actually lost money, i.e. had negative revenue.
- How likely is it to have negative daily revenues?
Very rarely, but if it happens, it can be large, in the millions (see above).
- @ishraq8 as the PS for lending, do you have any opinions on this?
