I went back to the whitepaper's liquidation section today, past what I'd already covered in this series.
Worth being precise here. Babylon's own paper says liquidations run through a whitelisted set of liquidators watching price and vault state, not a fully open set.
My first read of "trustless" assumed it applied evenly across the whole system, liquidation included.
Not quite. The vault's own spending logic, unstake, liquidate, slash, is enforced cryptographically. But the liquidator set watching for the trigger condition is whitelisted. Different guarantee, same word covering both.
So a liquidation isn't price drops, then liquidated. It's price drops, an oracle reports that, someone from a whitelisted set notices and acts, and only then does the cryptographic enforcement get invoked.
The paper is upfront about this itself, not hidden. But the oracle dependency and the whitelist sit quietly upstream of the part everyone calls trustless.
I don't know how that liquidator whitelist actually gets decided or updated over time. Not something I've found spelled out.
During a fast enough price move, does the vault's cryptography matter much if the whitelisted liquidators watching for the trigger are slow, thin, or the oracle lags behind? š
#baby $BABY
Worth being precise here. Babylon's own paper says liquidations run through a whitelisted set of liquidators watching price and vault state, not a fully open set.
My first read of "trustless" assumed it applied evenly across the whole system, liquidation included.
Not quite. The vault's own spending logic, unstake, liquidate, slash, is enforced cryptographically. But the liquidator set watching for the trigger condition is whitelisted. Different guarantee, same word covering both.
So a liquidation isn't price drops, then liquidated. It's price drops, an oracle reports that, someone from a whitelisted set notices and acts, and only then does the cryptographic enforcement get invoked.
The paper is upfront about this itself, not hidden. But the oracle dependency and the whitelist sit quietly upstream of the part everyone calls trustless.
I don't know how that liquidator whitelist actually gets decided or updated over time. Not something I've found spelled out.
During a fast enough price move, does the vault's cryptography matter much if the whitelisted liquidators watching for the trigger are slow, thin, or the oracle lags behind? š
#baby $BABY