Move Bad Debt from the current debtors to the BNB bridge exploiter account to eliminate remaining shortfall

With the current market conditions there’s an opportunity to finish clearing all of the Venus shortfalls.

I am proposing Venus moves the most significant bad debt from the current debtors to the BNB bridge exploiter account. The total bad debt moved to the BNB bridge exploiter would be worth approximately $34,7M. By shifting specific debts to the BNB bridge exploiter account, we can effectively liquidate the outstanding debts.

Specifically, the following debts would be moved:

At the end of the process, the BNB bridge exploiter’s total debt will be increased by (approximately) $34.7M, and the listed debts will be removed from the current debtors.

The current collateral of the BNB bridge exploiter is $138.3M. Its total debt is $110.5M. So, after completing the proposed movements, the bad debt (debt not covered by any collateral) will be approximately $6.9M ($34.7M + $110.5M - $138.3M). This bad debt will be repaid with the income generated in the previous liquidations of the BNB bridge exploiter, as it was proposed here Proposal: BNB Bridge exploiter account remediation - Proposals - Venus Community

The health rate of the BNB bridge exploiter after completing the proposed movements will be approximately 0.74 ($138.3 * 0.78 / $145.2M).

The proposed movement of the debt can be achieved with a VIP performing the following actions:

  1. Increase the Collateral Factor of BNB, above 100%. To do that it would be needed to upgrade the Comptroller implementation, removing the current check that avoids that.

  2. Upgrade the implementation of the MoveDebtDelegate Enable MoveDebtDelegate for BTC and ETH Shortfall Account contract, swapping the order of the core actions done in that contract: it will first borrow on behalf of the BNB bridge exploiter (taking advantage of the new enough borrowing power), and then it will repay the debt.

  3. Invoke the function moveDebt in the MoveDebtDelegate contract, one time per debt to move (see above)

  4. Restore the original implementation of the MoveDebtDelegate contract

  5. Restore the Collateral Factor of BNB, to 78%

  6. Restore the original implementation of the Comptroller implementation

1 Like

Let’s go, let’s clear the debt :slight_smile: Very positive news!

lfg!! Venus to the moon

Eliminate debt and move to sound operations.