MIPXX: Fix Price Flipper / Stable Coin liquidation

#1

MIPXX: Fix Price Flipper

Introduction

Following the issue with stablecoin, and a lot of discussion we need to introduce a simple and gas efficient flipper/ clipper with no price slippage.

MIP#: XX
Title: Fix Price Flipper
Author(s):  Alexis
Type: Technical
Status: 
Date Proposed: 2021-02-08
Dependencies: None
Replaces: Nothing

Sentence Summary

MIPXX will allow a simple way to flip fix priced assert by one bid auction.

Paragraph Summary

MIPXX is a simple flipper/clipper specific for stablecoin, that reduce the amount of effort for the bidder.
The flipper/clipper will start the auction as a normal flipper/clipper.

But the auction system (dutch or English) is removed and instead we introduce a buy(id) function that
allow anyone to get the auction.

Component Summary

MIPXXa1: Parameter Definitions

MIPXXa2: Function

MIPXXa3: Authorisation

MIPXXa4: Static Reserve For Governance

MIPXXa5: Proposed Code

MIPXXa6: Test Cases

MIPXXa7: Spell

MIPXXa8: Security Considerations

MIPXXa9: Licensing

Motivation

We currently have a major issue with all stable coins inside the vaults, this flipper/clipper
will allow an ordering liquidation by fixing the price. The price can be set to 1 dai for 1 TUSD/PAX/USDC.

Clearly, setting the TUSD DC at 0 had a limited impact.

The main issue with the auction system either dutch or english is that we can’t predict the price at 0.1% which is our margin.

The idea is to fix the price at 1.00 or even higher/lower - slightly higher than the psm price for example - and allow anyone to bid on any vault in liquidation state.
As soon as you bid on it you won. By calling buy(id) we transfer from your vault the amount and transfer back the gem.

Specification

MIPXXa1 Parameter Definitions

  • price : auction price

MIPXXa2: Functions

there is only two functions

depending of this system used:

  • kick(usr, gal, tab, lot, bid) auth for the liq1.2

  • take(id, amt, max, who, data) for liq2.0

  • buy(id)

It also has three admin methods

  • file(bytes32 what, data) : To change parameters
  • rely(address contract) : To add authorized address
  • deny(address contract) : To remove authorized address

depending on the system :

MIPXXa3: kick(usr, gal, tab, lot, bid)

  • Increase the number of auctions
  • Move the token position from the sender to the flipper
  • Start the auction

MIPXXa3: take(id, amt, max, who, data)

  • add id to active
  • Increase the number of auctions
  • Move the token from the sender to the flipper
  • start the sale

MIPXXa3: buy(uint id)

  • Take lot from the flipper and give it to the bidder.
  • Move lot*price from the bidder to vow
  • delete the bid

MIPXXa5: Proposed Code

Not yet implemented

MIPXXa6: Test Cases

Not yet implemented

MIPXXa7: Spell

Not yet implemented

MIPXXa8: Security Considerations

Not yet evaluated

MIPXXa9: Licensing

AGPL3+

#2

I am a bit confused by this.

SIngle bid winner sounds more like a dex ask. Why not just put these vaults up on oasis at 1 or slightly below the PSM offer if you are going to propose this? In fact you could take all the vaults you want to clear with such an offer and just group them into one single lump of ‘offer’ and allow people to take as much as they want at the price?

This would massively save on gas than doing the above imo.

#3

The question is how do you do that?

Here we just need to reactivate the liquidation and put the flipper in place.

Most of the problem is code and how do you reduce risk. Here I know exactly how to do that. - at some hegde case.

Also it is generic works for cropjoin, uniswap lp usdc/dai, PSM ( not sure if it is needed tho) and might fix the security issue with the MoM. ( I am not sure tho).

It can be let in place in case we reactivate the vault.

#4

I am not sure what you meant here.

I would like to do that but I can’t see an easy, simple way to do it.
I am open to proposition to be honest, I started this because it seems no one take it as action.

#5

The PSM basically will sell DAI for USDC, and buy USDC for DAI. What I am saying is if one is going to clear the vaults do it inside the PSM spread vs. just setting the price to 1.

Not that I have an idea about system mechanics spellwise but I am guessing that Maker itself could put up DAI for stablecoins and basically be the single bidder on all the vaults we want to clear. Do this in one shot via a governance spell then take the stable coins and put up an offer on oasis with another spell. Honestly I don’t know the mechanics required here but once a vault CR is under the LR Maker has free reign to liquidate however and whenever it wants.

#6

Yes the price can be set so it can be inside the PSM spread or out side.

For example tusd can be put at 1 as we want to get rid off them.

We can also by governance buy big usdc vault and put them into the PSM. or put a price below the PSM.

You need multi action there, I believe it is not that simple. You need to find all vaults need to be liquidated accumulated and make sure oasis return the money to the vow decrease the sin etc.

All those stuff are done by the liquidation process.

Here we are at the end of the process. So all stuff are done. We just remove the auction process and go straight to the deal.