What does ORCA get out of this? Why wouldn’t Abracadabra build the UI itself?
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looks like abracadabra does all the work and orca collects the fees for writing some html… also they have a token for some reason
it would be different if orca planned to create and audit the smart contracts in this pitch but i’m not sure how “you do all the work and i collect all the fees” is a great proposal
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From the point of view of sSPELL holders it seems like it would be best implemented natively here on abracadabra, borrow some MIMs and get a X% discount on an asset you want to pick up while also generating fees for sSPELL holders seems like a win-win.
Am I overlooking something?
If the benefit is from introducing new people to the protocol, we have a marketing/bribing/farming allocation for this already.
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Hi, I’m glad you liked the proposal. We’ve been very clear with the Abracadabra team that we will help in any way with any part of this process, including designing and writing the smart contracts.
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This is such an important requirement. Do it, do it, do it…
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Amazing proposal and clear write-up. Adding an order-book model to liquidations allowing everyday frogs to purchase their favourite collateral at a discount is the definition of a win-win for all. A simple and elegant solution. You have my vote.
One thing I want to add is that this would allow us to put more exotic (and therefore less desirable from liquidators POV) collaterals on Abra without fear of MIM losing backing, such as vote locked tokens (i.e. locked CVX)!
Yet again proving that the Abra x Terra collaboration has and will continue to be the STRONGEST in all of defi. 
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Great idea! I agree in principle. I think alternatives to outsourcing to Orca should be considered. I like the idea of developing a similar mechanism in-house, where even Abracadabra itself could bid on certain collateral being liquidated.
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I created account only because of this post.
Hope you guys make it, i like Kujira on terra so much, it give stability to anchor and the whole terra ecosystem.
It is even good for people who get liquidated because they are liquidated with lover premium, so basically they lose less money.
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Hi dove, if you are willing to design and write the smart contract for the queue, then it should be explicitly mentioned in the proposal instead of some backroom deal. Right now, the proposal is shocking vague on a number of things.
- Who is funding/writing/auditing this liquidation queue?
- What % of liquidations is Kujira going to charge as a fee?
Right now, it seems like kujira wants to profit off of the hard work of abracadabra without giving anything back. Still don’t understand why abracadabra.money shouldn’t just host the UI natively without a fee.
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Hi FR, please do feel free to reach out to the Abracadabra team and community to double check if it seems like we’re wanting them to do all the hard work without giving anything back. We’d like to think that we bring a lot to the table, especially the experience of having worked hand in hand with Anchor on their liquidation contract, as well as launching a successful product that allows anyone to bid on liquidations in a nice and intuitive UI.
RE exactly who is writing the contracts, nothing backroom about it. This is a forum post / proposal to see if people are into the idea. Nothing being held back at all. I think our fee structure is pretty open. 0.5% on withdrawals if you pay with $KUJI.
I do understand though that as a liquidator that relies on front running people to make profit, that this isn’t ideal for you personally. What we’re trying to do is make this fair for everyone else. You were 1 of 5 liquidators on Terra before and we truly do understand that it must be hard that you can’t take all the gains at 30% anymore, but truthfully, we feel that’s very unfair and not democratic at all.
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I saw this on Squirrels wall today. You need to advertise forum more, i just found out we have it .
I can just comment on the idea.
As both investor in ice and spell i was looking at the bloodbath that was caused by liquidators during this last crash. I think Dani also pointed out there was a lot of hard liquidations as well. General idea therefore looks great. I dont think i saw anything similar before on either chain, so will deffo look more into Kujira.
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I love this idea, allow everyone to participate in liquidations so the price is not at the mercy of liquidators who just want to make profits by selling the underlying.
Give me a x% discounted SPELL and I wont sell it 
Not exactly sure about the technicals and especially how the fee share should be done but this is definitely going in the right direction imo, you have my vote.
Also like the @0xWenMoon’s idea in the sense that it could help bidding on assets that are not as liquid as the one we currently have.
Give me discounted locked CVX and I double wont sell it unlike regular liquidators !
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The way I read it, the proposal leaves some of the specifics up to the team and community, but offers an expedited way to fast-track this process.
So far I’ve heard overwhelmingly positive feedback in the discord on it.
Whether the team utilizes Orca/Kujira for some or all of it, it seems to me that this proposal deserves a broader hearing.
If the community likes the concept, they may want it implemented sooner than later, and a closer discussion with the team would be warranted.
If it’s true that you are personally a liquidator, I can imagine the idea of expediting the implementation of a way to share those benefits with others would be off-putting to you, and you may prefer to slow the process down.
But I do think it would be fair for you to disclose this conflict of interest when you throw up objections that seem more geared toward slowing things down (and thereby letting you squeeze out the last of your gains) rather than being genuinely helpful.
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Is this a serious response?
Ok, so lets get to the hard questions. What exactly did kujira build for the anchor liquidation queue? Looking at anchor github, every single line of smart contract code was written by the anchor team and 0 lines of code was written by kujira.
Does kujira intend to build this smart contract and what technical background does kujira have to do so? Are you guys hiring a solidity dev? How exactly are you planning on helping the abra team if you guys have never written a line of solidity? Is there anything you can point to which would suggest that kujira is even capable of writing evm contracts that will hold 10s of millions?
Now, lets look at the value proposition you present. Anchor protocol liquidations have the following fee structure:
1% fee to liquidation bots triggering liquidations
1% fee to kujira (unless you buy kuji, then its .5%)
1-30% liquidation bids
So anchor liquidations allow a completely unheard of 32% liquidation fee, completely wrecking borrowers. Currently, the liquidation fee on abracadabra is 4% to 12.5%, so you are introducing a worst case of paying 7 times more with anchor’s fee structure.
There is also the question of if 1% liquidation cranking fee will be enough to incentivize liquidation bots to crank liquidations given ethereum tx fees.
But I think those might be solvable. Provide enough % to liquidation crankers and create a queue from 4-12% depending on the collateral risk, BUT i still see zero reason why the front end should not be in abracadabra.money with zero usage fees.
I agree with the spirit of the proposal that devs should always work to reduce MEV and a liquidation queue bidding system certainly does that. My main issues with this proposal are the follow:
1. Kujira has no history of writing evm smart contract so how is kujira supposed to help the abracadabra team?
2. If the abracadabra team is creating the queue, why wouldn’t they also host the liquidation queue UI instead of paying a 3rd party a fee?
3. Currently, sSPELL holders collect 10% fee on liquidation, any fees from this liquidation queue should go to SPELL stakers and not Kujira
edit: also to show how unnecessary it is to pay a 3rd party a 1% fee, here is a couple of lines of python code that allows you to make the smart contract call on anchor protocol which withdraws the liquidated collateral without any fee.
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I’ll try keep this short because you’re polluting this post with absolutely no knowledge of our team or experience.
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We have a smart contract developer with many more years of experience writing contracts than you do, so as much as we appreciate your concern, we have that covered.
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The Abracadabra team actually approached us on Twitter and we got chatting about the potential of a collab, hence the proposal. You make it sound like there’s some evil at play here. Afraid not, just a potential for collaboration.
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Thanks for sharing the tool for people to avoid fees. I’m sure a few people will find that useful.
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On what we did with Anchor and the contract: I never said we wrote it, I said we worked alongside them on it. We supplied documentation to them around how it should ideally work, and for security reasons they wrote it, but we had weekly checkins etc during the process. Please do contact them to verify this.
Again I will add though that you are simply a disgruntled liquidator, clear from all of your work
We totally get it, you’re against someone taking a small fee for offering a service. Now let’s perhaps leave the community to decide.
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This proposal seems good at first glance, but actually is factually inaccurate and has a mistaken understanding of the way liquidations currently work on Abracadabra, the lack of capital requirements to become a liquidator on Abracadabra, and the design history of liquidation processes in general over the last few years of DeFi. I believe the proposal is a significant downgrade from what Abracadabra currently offers. I would caution other frogs not to trust this proposal with so many inaccuracies.
First, the devs behind Abracadabra and Kashi (the basis of Abracadabra) developed a unique and smart way of ensuring liquidations require no upfront capital, are democratically available to everybody, and are possible to trigger in a decentralized way. They even made it so liquidations already benefit the community by redistributing liquidation fees back to the protocol. This is through the use of swappers, which they deploy alongside each cauldron. These swappers allow anybody to directly liquidate any insolvent user by using flashloans, meaning no capital is required up front to liquidate. If anyone views the contracts and the liquidate function, it allows you to specify a swapper address to use during liquidation. The swapper contracts are public and free. Nobody needs to deploy their own contracts or have millions of dollars in order to perform liquidations. It doesn’t need to go through a third party protocol and doesn’t require paying any fees. The unique liquidation design also sends liquidation fees back to the protocol to benefit all SPELL holders. This is already happening, and SPELL stakers have benefitted from millions of dollars in liquidation fees. As Daniele himself recently tweeted a few weeks ago, Abracadabra’s liquidation system passed the “stress test” of recent market volatility and is proof MIM and the protocol are strong and resilient.
Second, I’ve seen major misunderstandings in Discord about the way liquidations work on Abracadabra and this post seems to play into the misunderstandings. Liquidation is very simple: if at some point in time your collateral is not worth more than some multiple of what you’ve borrowed (usually 1.11 times what you’ve borrowed), you get margin called. Anybody can repay your loan for you, plus pay a fee to the Abracadabra protocol, in order to seize your collateral. This closes the loan for you and you get to keep any MIM you have borrowed, but lose the collateral you locked up. There is no “maximum benefit” or “maximum toll” that liquidation is extracting. The liquidators don’t get to set the price of a liquidation. It’s just repaying a loan for a borrower and taking the collateral when a margin call is triggered. The biggest liquidator is “El Patron,” the Abracadabra team’s bot, which they run to keep the protocol stable, so it’s not true that it’s a bunch of “large capital reserve” bots running the show.
It’s actually important that liquidations for any protocol happen rapidly, fully, and efficiently. As seen in previous market crashes, prices for tokens can drop 5-10% in just a minute. This means that unless liquidations happen very quickly, the collateral of an insolvent borrower can be worth less than the loan value. If this happens no liquidator will perform a liquidation. This is a worst case scenario and means MIM becomes not properly backed by collateral (“underwater”) and could depeg.
Third, protocols have experimented with auction-like or queue-like liquidations in the past with poor results. For example, MakerDAO had instances where during a crash the auctions barely functioned. Because prices dropped so quickly, the auctions performed poorly and liquidators were able to purchase collateral for almost nothing. Everyone got rekt because of the bad liquidation design, which is exactly what Kashi and Abracadabra are made to avoid. The reality is that the Abracadabra/Kashi CDP liquidation system is time-tested and strong. It is simple, decentralized, democratic, and proven.
A few more points:
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The proposed mechanism is actually less democratic than the current system. Under the queue/auction system, liquidators need to have tens of thousands (if not millions) of dollars that they are able to lock up ahead of liquidations. Only the richest frogs have the money to be able to do this, and ORCA is going to take fees from them. But right now, anybody who wants to work on coding up a bot can do liquidations for free.
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ORCA introduces additional smart contract risk. It wasn’t made by Daniele and the dev team, and doesn’t seem to be audited (though I could have missed the audit report). Why pay fees to and trust an outside group when what we have is working great?
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Cascading liquidations from Abracadabra are not really a concern for most cauldrons. Selling even $100M of liquidated yvWETH or cvxTricrypto collateral would be inconsequential during a crash when $78B of ETH were traded in one day during the May crash on centralized exchanges and $11B on DEXs. That same week, $12 Billion of leveraged Bitcoin positions were liquidated. The chosen Abracadabra liquidation mechanism has literally zero effect in these markets when compared to institutional investors.
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The example used of ORCA’s success is silly and cherry picking at its finest. It’s comparing what happened to the price of LUNA during the May crash to its price over one of the best bull runs. It’s not clear how the system will perform next time there is a massive crash and their approach has not been stress tested like Abracadabra’s already has been.
This seems like a complicated system to get at what we really want: more of the liquidation proceeds going back to the community. If this is true, then just modify the cauldrons to increase the liquidation fee that goes to the protocol. This keeps all of the stability and simplicity of the current design, but increases the amount SPELL holders benefit from liquidations. And it does all of this without paying millions in fees to Kujira.
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I don’t see a need for personal attacks against him. Liquidator or not, he is a frog friend and member of the community. I think doxxing his Github is completely inappropriate for this forum and against the community guidelines. He is part of the community, so let him have a voice as part of the community that gets to decide on your proposal.
He only joined the community to attack Kujira it seems, contributed nothing else - as with your profile.
Just to note that he joined this community only to make the post trying to discredit Kujira. He signed up yesterday then posted right away. And I agree the community needs to decide, but he is making very bold assumptions on our team experience and various other things with no knowledge around any of that. That is why I was replying to his points.
He’s also going around on Twitter advertising a piece of software that means people get around paying a 0.5% commission on our platform that we worked for 6 solid months on. He was our very first backend dev, and left to get a full time job, but is still attacking us for seemingly no reason.
He was a liquidator on Terra and the new / more fair contract meant that he couldn’t liquidated people at 30% anymore, so that’s all this is about.
I have no problem if it’s constructive, but I don’t think it is at all. But for sure I won’t be engaging anymore. Just felt it necessary that at least if we’re being attacked that people have the full story. Cheers
I want to add a few lines myself on the topic. First off Wonga attacking someone that he only joined community to attack someone can be said for him, as he joined 16h ago.
I also joined this morning - this is not because someone is joining to attack someone, but i think a lot of people were unaware of the forum until few recent tweets from the team. Not all of us can spend 20h in discord. I’m just reading through all the posts, and at least we have a real discussion here, unlike on some previous topics where bunch of people just said “yea great teams we need this” and then snowbank rugpulled.
As for the whole topic, imho no one got it as right as @ozymandias. A lot of people here are only here to see their token pump 10x. They do not understand that liquidations are actually quite a good thing if you want to have a “stable” stablecoin. If liquidations weren’t as efficient as they were during this market crash, MIM peg would make no sense - and if MIM peg devalues strongly, the whole Abracadabra makes no sense. People using high leverage on anything they invested in shows how unattached to the real market they are - its enough to see that people borrowed almost to the max on wMEMO, which makes no sense at all.
Not only that I agree with ozymandias, but I think the proposals need to be more serious when they are posted - the way it’s posted here it looks like a 10min work, draft at it best. Showing us a major Luna crash in May that happened for various reasons - at one point luna had almost a smaller mcap then UST! (not bashing luna or UST, I’m a fan, just providing context), and claiming that recent downfalls were better because of Kujira is a huge overstatement for anyone that’s closely involved with Terra ecosystem.
Also the way deadrightdove communicates here with a community member that asked in my opinion legitimate questions is just poor. Maybe his questions sounded a bit hostile, but it’s a forum discussion, and if he is a legitimate owner of spell or any abracadabra token, he has a right on them. the way dove handled them dont really put any confidence in his abilities.
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