The Aspidiske Release - Liquidation of SNX Escrow

Synthetix -

Today, Oct 20th, the Aspidiske release will begin. Here's what's included in this release:

  • SIP-252: Liquidation of SNX Escrow: Allows SNX entries to be liquidated in case of force liquidation

Motivation for Change

In the initial release of the new liquidation mechanism escrow entries couldn't be liquidated, allowing accounts to circumvent the intention of SIP-148 by not vesting their escrow entries. This leaves the protocol with some staked SNX and debt that can't be liquidated.

Allowing escrow entries to be liquidated helps restore the network collateralization ratio, as the debt would shift to other stakers, who acquire the escrowed entries at a discount and take on the delinquent debt. Overall, liquidating those far under the liquidation ratio allows the protocol to be more resilient and better capitalized in the long run.

Liquidation of SNX in Escrow

The updated mechanism will allow both SNX tokens held in an account and escrow entries to be force liquidated (not self liquidatable) until the target issuance ratio of an snx staker is restored.

If an account does not hold enough snx to restore to the target issuance ratio, then the stakers' account is closed with debt cleared, and all the snx in the account is sent for other stakers to claim.

If the self-liquidate method is called, a user's account is liquidated with only the snx available in his account (this does not include escrow). This ensures accounts cannot use self-liquidation to bypass escrow of SNX when liquidation is unnecessary.

Additional Mechanism Changes

  1. Accounts that have HAV Token Sale Escrow will no longer be able to mint with those tokens, there are only 2 stakers (with 890 snx) currently minting with such escrow tokens.
  2. Accounts that are flagged for liquidation and self-liquidate will not have their liquidation flag automatically removed. They can still remove it by burning debt to return to the target.
  3. Accounts that don't have enough snx to restore to health via forced liquidation will not be able to self-liquidate.

Any Questions?

If you've got any comments or questions about the release, please join the conversation on Discord. This release is called Aspidiske, which like all releases, is named after a star (in order of visual magnitude).