Liquidate Collected KSM Collateral
Democracy
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Background

Karura aUSD liquidation has a triple cushion/protection system. It will attempt to sell the collaterals on the DEX first, if the price does not meet the required levels, then it will attempt to sell it on auctions, and if that’s unsuccessful, then the collaterals will be collected by the CDP treasury. These collected collaterals can later be sold to clear aUSD debt.

Karura CDP treasury currently has 18,686 collected KSM collateral. The proposal below will outline steps to sell off these KSM to clear aUSD debt.

Proposal Summary

The goal will be to maximize the amount of aUSD that can be recouped from selling off the collected KSM to repay aUSD debt. There are two on-chain mechanisms at our disposal: auctions and DEX. Auctions will likely result in selling collaterals at a discount, while using the DEX will have better chances to maximize the amount of aUSD recouped.

The following steps will be required to execute via DEX

  1. Delegate the KSM to a proxy account that only allows DEX transactions (no balance transfer or other actions are allowed)

  2. A trading bot will be using this proxy account to execute trades with the following principles:
    a. Execute small enough trades to avoid slippage
    b. Stop trading if the current KSM trades cannot cover the aUSD debt
    c. Restart trading if projected KSM trades can cover aUSD debts
    d. Randomize trading windows to avoid front-running

  3. aUSD traded will directly be deposited back to CDP treasury to cover debt

Proposal Hash

0x030208030300016d6f646c6163612f63647074000000000000000000000000000000000000000005010082c0e07e7d0d963b5a83937311d816771583ba26513ded06f1d889531c00d7010400000000030300016d6f646c6163612f63647074000000000000000000000000000000000000000005010082c0e07e7d0d963b5a83937311d816771583ba26513ded06f1d889531c00d7010900000000

Proposal Context

CDP treasury vault address (qmmNufxeWaAUp4SVa1Vi1owrzP1xhR6XKdorEcck17RF498
) delegate DEX swap and Homa transaction proxy to be used by trading bot (rFibBR3JY6BQgWS6owJJz3fgC9Mwp5EzFwPB42Zzg4fUzA5)

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Metadata
Proposer
Hash
Delay
02023-02-17 06:09:30
End
02023-02-15 05:26:24
Threshold
Call
Table
Json
callIndex0x0302
sectionutility
methodbatchAll
args
calls
0
callIndex0x0303
sectionutility
methoddispatchAs
args
asOrigin
system
signedqmmNufxeWaAUp4SVa1Vi1owrzP1xhR6XKdorEcck17RF498
call
callIndex0x0501
sectionproxy
methodaddProxy
args
delegate
idrFibBR3JY6BQgWS6owJJz3fgC9Mwp5EzFwPB42Zzg4fUzA5
proxyTypeSwap
delay0
1
callIndex0x0303
sectionutility
methoddispatchAs
args
asOrigin
system
signedqmmNufxeWaAUp4SVa1Vi1owrzP1xhR6XKdorEcck17RF498
call
callIndex0x0501
sectionproxy
methodaddProxy
args
delegate
idrFibBR3JY6BQgWS6owJJz3fgC9Mwp5EzFwPB42Zzg4fUzA5
proxyTypeHoma
delay0
TimelineLatest activity undefined
2023-02-10 02:52:54
Started
referendumIndex
79
voteThreshold
SuperMajorityApprove
2023-02-15 05:26:24
Passed
referendumIndex
79
2023-02-17 06:09:30
Executed
result
ok
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