Tank and Liquidations

What's the Tank?

  • 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).

Why deposit BUCK to the Tank?

  • 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.

What are Liquidations?

  • 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.

Who can liquidate Bottles?

  • 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.

How do Tank Contributors benefit from Liquidations?

  • 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 Adopter Rewards

  • Early adopters earn rewards (BKT) proportional to their deposit size.
  • Rewards can be withdrawn to your Sui address at any time.

Withdrawal Terms

  • Deposits can be withdrawn at any time unless there are liquidatable Bottles below a 110% collateral ratio.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.

Risk of Loss

  • 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.

Empty Tank Scenario

  • If the Tank is empty, the system uses redistribution, sharing the debt and collateral from liquidated Bottles to other existing Bottles proportionally.