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State On May 1st
yvAjnaDAI had two strategies lending DAI to st-ycrv
Capital at risk: 399k DAI + 300k DAI
Both strategies were lending at 0.34051 per st-ycrv and market value was 0.6787
Based on market price, lending at a ~50% LTV
Originally, lending started at 20% LTV
Pool borrowing was at 29.25% increasing 10% every 12hs
Two of the biggest borrowers 0x0059efca9d24bf579ee0314e7bc2569674aa42e2, 0x286ee152779ca230a30337d3f96df7963e41a307 levered up.
There was 667k CRV in the curve ycrv/crv pool
Lowest health rate borrower had 861_239.55 st-ycrv as collateral and 258_117.99 DAI debt
Bond to kick borrower 2_565.99 DAI
Concerns
If liquidation happens it might
Wipe the ycrv/crv pool
It would sell around 1.3M CRV for DAI
It might tank the price of ycrv, causing other positions to go under
No market participation in the liquidation auction
Share Dialog
State On May 1st
yvAjnaDAI had two strategies lending DAI to st-ycrv
Capital at risk: 399k DAI + 300k DAI
Both strategies were lending at 0.34051 per st-ycrv and market value was 0.6787
Based on market price, lending at a ~50% LTV
Originally, lending started at 20% LTV
Pool borrowing was at 29.25% increasing 10% every 12hs
Two of the biggest borrowers 0x0059efca9d24bf579ee0314e7bc2569674aa42e2, 0x286ee152779ca230a30337d3f96df7963e41a307 levered up.
There was 667k CRV in the curve ycrv/crv pool
Lowest health rate borrower had 861_239.55 st-ycrv as collateral and 258_117.99 DAI debt
Bond to kick borrower 2_565.99 DAI
Concerns
If liquidation happens it might
Wipe the ycrv/crv pool
It would sell around 1.3M CRV for DAI
It might tank the price of ycrv, causing other positions to go under
No market participation in the liquidation auction
No mev bots participating in the auction because of no direct pool liquidity for st-ycrv
Options Explored Without Success
Tried contacting the borrower
Kept increasing the borrowing rate to force repayment
Simulated how long it would take for the user position to go below 1 on health ratio. It would have happened on GMT: Thursday, May 30, 2024 3:09:49 PM.
Decision Made
On May 2nd, we started a war room to liquidate the position.
Treasury allocated 500k DAI to baseline the auction
Treasury would participate in the auction with 100k collateral chunks and will start bidding when auction reaches below market price
st-ycrv strategy reward trading was halted to allow OTC with treasury
Bond price would be paid by vault liquidity
LOG
LenderKick Action
You can see in this transaction how capital was added to the strategy to pay for the lenderKick bond:
Another Borrower Repaid Their Debt
After the liquidation started, another borrower repaid their loan:
Takes
Take is the process of taking collateral and giving the pool quote token. In this case is taking st-ycrv and sending DAI.
Take #1: Not yearn
Take #2: Yearn took 2nd
Take #3: Not yearn
Take #4: Yearn took 4th
Take #5: Not yearn
Take #6: Yearn took 6th
Take #7: Not Yearn
Take #8: Yearn took 8th
Strategy Withdraw
Strategy withdrew all funds and reported a 2_781.66 profit. This number is, profit from the interest generated minus the bond price.
st-ycrv OTC with treasury
You can check the sender address for more details but important part is:
Keeper harvested seconds afterwards in
Conclusion
Liquidated party ended up with 348k st-ycrv.
Yearn strategy withdrew from the ajna pool with profit.
Yearn treasury ended up using 141_086.76 DAI from the 500k allocated.
275_627.5 st-ycrv were bought and OTC with the st-ycrv strategy.
No mev bots participating in the auction because of no direct pool liquidity for st-ycrv
Options Explored Without Success
Tried contacting the borrower
Kept increasing the borrowing rate to force repayment
Simulated how long it would take for the user position to go below 1 on health ratio. It would have happened on GMT: Thursday, May 30, 2024 3:09:49 PM.
Decision Made
On May 2nd, we started a war room to liquidate the position.
Treasury allocated 500k DAI to baseline the auction
Treasury would participate in the auction with 100k collateral chunks and will start bidding when auction reaches below market price
st-ycrv strategy reward trading was halted to allow OTC with treasury
Bond price would be paid by vault liquidity
LOG
LenderKick Action
You can see in this transaction how capital was added to the strategy to pay for the lenderKick bond:
Another Borrower Repaid Their Debt
After the liquidation started, another borrower repaid their loan:
Takes
Take is the process of taking collateral and giving the pool quote token. In this case is taking st-ycrv and sending DAI.
Take #1: Not yearn
Take #2: Yearn took 2nd
Take #3: Not yearn
Take #4: Yearn took 4th
Take #5: Not yearn
Take #6: Yearn took 6th
Take #7: Not Yearn
Take #8: Yearn took 8th
Strategy Withdraw
Strategy withdrew all funds and reported a 2_781.66 profit. This number is, profit from the interest generated minus the bond price.
st-ycrv OTC with treasury
You can check the sender address for more details but important part is:
Keeper harvested seconds afterwards in
Conclusion
Liquidated party ended up with 348k st-ycrv.
Yearn strategy withdrew from the ajna pool with profit.
Yearn treasury ended up using 141_086.76 DAI from the 500k allocated.
275_627.5 st-ycrv were bought and OTC with the st-ycrv strategy.
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