ParaSpace Navigates Asset Liquidation Crisis And Compensation To Users
- ParaSpace addressed asset liquidations that affected some users between July 3 and July 4.
- The platform promptly reimbursed the affected users for the price difference resulting from the liquidations.
- ParaSpace plans to host an event for affected users to provide clarity and remains committed to improving the platform for a user-friendly ecosystem.
ParaSpace, a decentralized NFT lending protocol, recently addressed an issue related to asset liquidations that occurred between July 3 and July 4.
A small number of users were affected when their assets were liquidated at prices below the floor price. The incident was a result of dutch auctions running on the backend without displaying the auctioned assets on the front end. ParaSpace promptly took action to rectify the situation and reimburse the affected users.
In response to the incident, ParaSpace’s team contacted each of the affected users to ensure open communication and resolve the matter promptly. The platform successfully reimbursed them for the price difference resulting from the liquidations.
The unexpected liquidations occurred as a consequence of successful purchases of NFTs during the dutch auctions. These successful purchases terminated the ongoing auctions, leading to prices dropping to the lower end of the auction range. Consequently, some purchases were made under the floor price, resulting in a discrepancy between the sale price and the actual floor price.
ParaSpace acknowledged the impact this event had on the affected users and prioritized their compensation. With transparency and accountability as core principles, ParaSpace demonstrated its commitment to its community members.
To further address the situation and provide clarity, ParaSpace will be hosting a space on Monday where some of the affected users will have the opportunity to share their experiences and receive more information about the incident. During the space event, ParaSpace’s team will also shed light on their mission for the platform and outline their future plans.
ParaSpace is dedicated to creating a secure and user-friendly ecosystem for its users. The incident served as a valuable learning experience for the platform, prompting further improvements in its smart contract mechanisms and auction processes to prevent similar occurrences in the future.
The platform is gearing up to launch Version 2.0, bringing significant upgrades to the future of lending. This user-friendly platform aims to empower the web3 community with seamless and powerful borrowing options. Excitement is building as the launch date approaches, marking a new milestone in decentralized finance.
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