# st-ycrv liquidation

*Yearn's ajna committee was forced to liquidate a position to avoid bad debt. The strategy and yearn treasury made it out with a small profit.*

By [yearn](https://blog.yearn.fi) · 2024-05-07

ops, ajna, liquidations

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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
    
*   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:

[https://etherscan.io/tx/0x6c6127da0f97d925c19b6d68b92996f7719986b36d82773de460759148edb908](https://etherscan.io/tx/0x6c6127da0f97d925c19b6d68b92996f7719986b36d82773de460759148edb908)

_Another Borrower Repaid Their Debt_

After the liquidation started, another borrower repaid their loan:

[https://etherscan.io/tx/0xec8e91ddc860744da95020457f7368951fe63d6a79b32c7c48a52bf5f92f66c1](https://etherscan.io/tx/0xec8e91ddc860744da95020457f7368951fe63d6a79b32c7c48a52bf5f92f66c1)

_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

[https://etherscan.io/tx/0x49265d13f3eab77d4031f632f87bed9f64368b45a3165934c6e7e70fa6e55054](https://etherscan.io/tx/0x49265d13f3eab77d4031f632f87bed9f64368b45a3165934c6e7e70fa6e55054)

Take #2: Yearn took 2nd

[https://etherscan.io/tx/0xd007d04560fc42df93da0fd25ac3942f89f7f5458eb492872b3d87be91d7a571](https://etherscan.io/tx/0xd007d04560fc42df93da0fd25ac3942f89f7f5458eb492872b3d87be91d7a571)

Take #3: Not yearn

[https://etherscan.io/tx/0x58d1793708e2846b0bdf9eeff5fe386bc46dec80ae2f3463817dd53b84da3203](https://etherscan.io/tx/0x58d1793708e2846b0bdf9eeff5fe386bc46dec80ae2f3463817dd53b84da3203)

Take #4: Yearn took 4th

[https://etherscan.io/tx/0x579056f777c1f05a18e566dd329ea85f5c747fd6e7246411b5e016c8bebe8742](https://etherscan.io/tx/0x579056f777c1f05a18e566dd329ea85f5c747fd6e7246411b5e016c8bebe8742)

Take #5: Not yearn

[https://etherscan.io/tx/0x171472cfe3285d8d6c011a61ee0d74bb1da299bb839ac23af7f40e26f03a8647](https://etherscan.io/tx/0x171472cfe3285d8d6c011a61ee0d74bb1da299bb839ac23af7f40e26f03a8647)

Take #6: Yearn took 6th

[https://etherscan.io/tx/0x83cb858d746d4ed3c6b39a56386b2b63476300bb211eeba451b921d7e2eb9381](https://etherscan.io/tx/0x83cb858d746d4ed3c6b39a56386b2b63476300bb211eeba451b921d7e2eb9381)

Take #7: Not Yearn

[https://etherscan.io/tx/0x87850cabdf9b0817db89ecb6b848b33bada213466d9ea53e4cc0f16ede733115](https://etherscan.io/tx/0x87850cabdf9b0817db89ecb6b848b33bada213466d9ea53e4cc0f16ede733115)

Take #8: Yearn took 8th

[https://etherscan.io/tx/0x94e1a85fa25e433976962449588e522ce0f2a81ae3d4b67ae199e458dfce4e39](https://etherscan.io/tx/0x94e1a85fa25e433976962449588e522ce0f2a81ae3d4b67ae199e458dfce4e39)

_Strategy Withdraw_

[https://etherscan.io/tx/0x4d14880ede8cefa9421f938e69f93b7a728f339c03a237922ce23978007e9000](https://etherscan.io/tx/0x4d14880ede8cefa9421f938e69f93b7a728f339c03a237922ce23978007e9000)

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:

[https://etherscan.io/tx/0xcb000dd2b623f9924fe0234831800950a3269b2d412ce9eeabb0ec65cd737059](https://etherscan.io/tx/0xcb000dd2b623f9924fe0234831800950a3269b2d412ce9eeabb0ec65cd737059)

Keeper harvested seconds afterwards in

[https://etherscan.io/tx/0xf79a1e3adf8dc6e6e6bb62ad00d910271e576286f33effc313195828aecc1419](https://etherscan.io/tx/0xf79a1e3adf8dc6e6e6bb62ad00d910271e576286f33effc313195828aecc1419)

**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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*Originally published on [yearn](https://blog.yearn.fi/st-ycrv-ajna)*