Black Thursday Response Thread

Flip auction TTL: 10 minutes => 6 hours
Flip auction maximum duration: 3 days => 6 hours

Setting the TAU equal to TTL makes a lot of sense and resolves most of the problems that come with just increasing the TTL (which was the plan a few hours ago), so good call!

However, I can still see some issues that should be addressed:

  • Make it clear to CDP owners that the liquidation penalty can be as high as 33%. And that it’s most likely considerably higher than 13% during a crash like yesterday.

  • Increase the Surplus Buffer: If the value of the collateral falls more than 33% during the 6 hours, the debt will increase, even if keepers pay close to market rates.
    Also, it is likely that bids will only happen in the last few minutes of the auction: Maybe a -25% bid 10min before auction end with some keepers trying to get a bid in at -5% in the last seconds of the auction. If the gas price spikes, the -25% could end up winning, further increasing the debt.

It might be helpful to show the number of distinct keepers on the website. By distinct, I mean the weighted average number of bids per auction.

Yeah, we owe them as least some proportion of the assets that were lost.

Yeah, I’m in favor. The surplus buffer is DAI that we’re not paying the DSR on. So I’d like to see all those MKR holders who are clamoring to lower the DSR (away from DSR=SF) to instead clamor to increase the surplus buffer.

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Lowering the TAU seems good.

Another reason for delaying the mkr auction is that it gives the people interested time to accumulate the 5m DAI.

Its in makers best interest if they’re able to accumulate closer to the peg.

I’ve been trying to dive into some of the details a bit more. So from a high level view I think the consensus is that:

1: Cryptos started tanking and people wanted to sell
2: This causes network congestion, increasing the gas cost and transaction backlog
3: Keepers didn’t issue transactions with sufficiently high gas price
4: Only one (or a few?) aggressive keeper was bidding zero, which sufficiently high gas price…

But then looking at the docs, on, I find:

“Once the auction begins, the first bidder can bid any amount of Dai to aquire the collateral amount ( lot ). Other bidders can raise that bid offering more Dai for the same collateral amount ( lot ) until there is a bid that covers the outstanding debt.”

This part I don’t get. If we’re saying there was one aggressive keeper that bid zero, at what point did this become a bid that covers the outstanding debt?

Next in the docs: “If and when there is a bid that covers the outstanding debt, the auction will turn into a reverse auction, where a bidder bids on accepting smaller parts of the collateral for the fixed amount of Dai that covers the outstanding debt.”

From the discussion yesterday I didn’t get the impression that there was any such process in place?

So dai auctions as per my understanding work in 2 phases the tend phase and the dent. First there is the kick phase this is where auction participants keep offering dai for the lot being auctioned. This will continue until the bid >= something called the tab. Tab is the amount of dai we are hoping to receive in that auction. Once the tab is covered the auction moves into the dent phase. In this phase participants compete by stating the smallest lot that they would accept for the amount of dai being offered.

My impression/understanding is that the auction just never entered the dent phase (i.e reverse auction) because the was not enough dai bid to cover the tab. I guess it is important to note that covering the tab is in no way guaranteed and it is a perfectly valid outcome for an auction to end without ever reaching the dent phase.

Not sure who is the best person to ask this question to, so I’ll just ping @LongForWisdom. I know that the executive vote was passed this morning, but many of those values were based off of last weeks poll options. I.E the 4% SF. Does it make sense to put out a new poll today for some of the monetary policy values such as DSR and DSR spread and setting that poll to end say monday?

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Not sure if this has already been brought up, but has anyone considered having an auction reset (or some other special action, e.g. extending the auction time) if the final price is >x% slippage from the current COLLATERAL/USD price feed?

Why? What’s wrong with the values chosen last week?

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nothing necessarily, but currently if people think that the numbers are not reflective of the current state of affairs they will need to wait until monday to voice that.


Hello all, firstly great to be here!

As we all know the Thursday gone has been quite a event and i for one was one of those that got all their collateral ETH liquidated without the option of claiming my left over ETH back, in short when I spoke to a admin from the Maker Dao team I was told I had been completely wiped out due to a glitch in the protocol, now i realise collateral is put up knowing the risks but surely we can do better, I refuse to believe I can just lose the best part of 150ETH and all I get told is sorry we can’t help!

Can any one kindly help with this, i would highly appreciate the help.



If I understand correctly, the most likely thing to happen is a debt auction, but when is it going to happen?

Also, an emergency shutdown hasn’t been completely discharged yet, am I right?


If you check last executive vote (state parameters changed few minutes ago) you will notice parameter change:
“Raise the Debt Auction Delay from 48 hours to 6.5 days”.

I believe this means auction starts early Thursday (UTC). But maybe someone can calculate exact time…


ES is never completely discharged. Potentially we can see another huge eth price drop, huge gas price increase and then we will see if collateral auctions will perform much better than last time. I would suggest observing auctions if eth price goes below 100$.

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Is there any discussion of the maker minting process being used to cover the ETH liquidated at a bid of 0? I think the DAO would greatly improve long term confidence if it covered liquidation at even a minimum fair market price minus the 13 percent liquidation fee. For example if someone had 100 ETH covering a loan of 5,000 Dai, even if they where liquidated at the bottom of the market price for ETH around 95 dollars they would have 40.52633 ETH remaining = 100 ETH - 5000/95 ( ETH sold at lowest market price to cover debt.) - ( .13 * 5000 )/95 ( 13 percent liquidation penilty).


Perhaps the first step is to create a google doc spreadsheet to calculate what is potentially owed to the CDPs that got liquidated.


Here’s the current debt queue.


Hi @banteg,

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Have a great afternoon !

So, just to clarify for non technical users…
first Flop (Debt Auction, i.e. MKR auction) will start at unix timestamp 1584561600, that is:
Wed Mar 18 20:00:00 2020 UTC

Edit: My understanding was incorrect and estimate below “This gives an estimate of 2020-03-19 10:25:01 UTC.” seems to be correct one. Currently :slight_smile: my understanding is that at first ‘sin record’ timestamp, Surplus Buffer of 500k started to get depleted and it’s not so trivial to determine exact time when auctions could start (surplus buffer reached 0), that is why it’s estimate.


(from chat) You have to account for canceling out all the Vow’s dai before flop() can be called.

Vow’s dai is currently sitting at 10,073,003, plus lot size of 50,000 dai. This gives an estimate of 2020-03-19 10:25:01 UTC.