Tank and Liquidations
- The Tank maintains system solvency by acting as a source of liquidity for liquidated debt.
- When a Bottle is liquidated, the Tank burns BUCK to repay the debt, receiving the Bottle's collateral in return.
- Users can fund the Tank by transferring BUCK into it (as Tank Contributors).
- Tank Contributors receive gains in SUI from Bottle liquidations, and rewards in the form of BKT tokens.
- Staked BKT tokens earn a portion of system revenue.
- Liquidations ensure the stablecoin supply remains fully backed by collateral.
- If a Bottle falls under the minimum collateral ratio of 110%, it gets liquidated.
- The Bottle's debt is absorbed by the Tank and its collateral is shared among Tank Contributors.
- Anyone can liquidate a Bottle when it drops below a 110% collateral ratio.
- The initiator earns 0.25% of the Bottle's collateral as a reward.
- Tank Contributors gain a net profit from liquidations as these happen just below a 110% collateral ratio.
- Contributors receive a portion of the liquidated collateral proportional to their share in the Tank.
- Early adopters earn rewards (BKT) proportional to their deposit size.
- Rewards can be withdrawn to your Sui address at any time.
- Deposits can be withdrawn at any time unless there are liquidatable Bottles below a 110% collateral ratio.
- When there is a bottle that qualifies for liquidation but has not yet been liquidated, Tank will temporarily halt withdrawals (while still allowing deposits).
- Longer deposit lockups can earn higher APR.
- Losses can occur if a Bottle gets liquidated below a 100% collateral ratio due to a flash crash or oracle failure.
- Losses are also possible if BUCK trades above $1 worth of SUI value.
- If the Tank is empty, the system uses redistribution, sharing the debt and collateral from liquidated Bottles to other existing Bottles proportionally.
Last modified 4mo ago