Summary
This proposal would upgrade the SAFU contract at 0x1eA63189eB1F4c109B10Cf6567f328C826AA6151 so that liquidation can only be called by the owner role, which is currently set to multisig 0x16c and could be passed to DAO governance or another party in the future.
Background & Rationale
As is, any address is able to liquidate a loan held by the TrueFi DAO Pools that has defaulted. This liquidation triggers a slashing of up to 10% of stkTRU.
The only active loan held in the TrueFi DAO pools is the delt.ai loan in the tfUSDC pool. As described in Delt.ai Loan due July 8, 2023 : Restructuring Update, TrueTrading has reached a restructuring agreement with delt.ai where 20% of the outstanding principal will be repaid this month and maturity on the remaining will be extended.
TrueTrading plans to airdrop partial interest and principal payments over time, directly to lenders of the tfUSDC pool. Since this airdrop mechanism will operate independently in the tfUSDC pool, it is anticipated that even if lenders are made whole, the on-chain TrueTrading loan at 0xCcdAe6aa60Eb981A45881cdFdA8763f7783c9e53 will not be repaid in full.
This proposal aims to prevent unfair slashing of stkTRU holders in such a case, by restricting SAFU slashing to the owner of the SAFU contract.
Future considerations
Ownership of the SAFU contract could be passed to DAO governance and revoked from multisig 0x16c as a next step. An on-chain vote through Tally would be needed to complete changing of the owner role.
