This is not a proposal just a topic for discussion so I wanted to see what other people think about this. BTW I am talking about $LINK token in this example.
As far as I understand there really is no deficiency in the protocol. The deficiency we talk about is the amount of money owed as ILP.
v2.1 stakers if allowed, will be able to get their stakes back with respective IL levels. So without the ILP, in traditional sense, there is actually no deficit in v2. If the same personalized IL were used for v3, v3 also wouldn’t have any deficiency minus the ILP in my understading. However IL is socialized across v3. Considering the markets, the main cause of the high haircut should be old positions that migrated from v2.1 having giant IL levels, which are being socialized across the board in v3. I’m making this guess about old positions because the prices have not moved that much to create a 60% IL since v3 was implemented, at least for LINK-BNT which is one of the flashpoints.
This shows that the real problem is not ILP being shut down. The real problem is that the protocol cannot pay out users even with their respective IL levels in v3.
I want to know, if in theory, every v3 user who migrated from v2.1 were forced back to v2.1 with their old profiles and every user who staked to v3 out of blue were moved to v2.1 with their own respectful profiles created for them in v2.1, would the protocol be able to pay everyone their assets back with the regular IL loss?
Meaning that a guy who staked few months back before the ILP shutdown would have very little IL due to prices not having changed much today. He could get his LP back with little loss. And a guy who staked during past bullrun having a much much higher IL due to large changes in token to bnt ratio at the time of his stake when compared to today would get a big haircut due to his personalized high IL level.
If v2.1 users can have their respective IL’s, even if they are not allowed to withdraw at the moment, can’t v3 users and migrators be backtracked to create their own personal IL profileS, and paid out in respect to their own positions in a fairer way?
Also if this were possible, are the current assets in custody enough to pay out to everyone with their own respective IL levels? Because it seems v2 currently can. Which makes me think the real problem with v3 is socialization, not ILP shutdown. o
Or is the v3 completely underwater? in the sense that even if everyone had agreed to personalize the IL losses, the funds can’t match to pay them without ILP individually?