Proposal: Allow gotchis to take on debt

Last week, I put up an idea to add functionality to aavegotchis to take on debt. Because the idea seems straightforward and there were no objections, I am now proposing the idea to the Gov’nuhs of the Gotchiverse.

With the release of Haunt 2 comes new aavegotchis that use collateral from the AAVE Polygon market. This opens up the potential for gotchis to take on debt using their spirit force collateral. Spirit force is currently underutilized with most gotchis simply storing the minimum amount of collateral necessary to keep it alive. Allowing gotchis to take on debt would increase the utility of the gotchis, and would add the potential for gotchis to be liquidated for the sadistic gamblers among us.

Additionally, AAVE has a credit delegation feature which could potentially allow the user to directly borrow assets from AAVE with credit delegated from their gotchi. If this were to be implemented, the credit delegations should be reset to zero upon any transfer of a gotchi to prevent any funny business. Because of the potential implications of this feature, this may not be technically viable to implement.

Please comment with any thoughts or concerns with my proposal. If there are no objections, I will be putting up a signal proposal on snapshot next week with the following choices:

  1. Allow gotchis to take on debt
  2. Allow gotchis to take on debt and delegate credit
  3. Do not allow gotchis to take on debt

The vote will be approval based voting, allowing voters to select any number of options, to prevent the splitting of votes between choices 1 and 2. Let’s get liquidated, gotchigang!

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If the gotchi is “liquidated”, it is considered sacrifice right?
Also how does the credit delegation work ?

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If liquidation causes collateral to fall below the minimum required, then I believe the gotchi should be liquidated. I’m actually unsure of how this would work on a technical level though, since liquidators do not interact with the aavegotchi contract, and so the contract would basically be unaware of the fact that the collateral value fell below the minimum. Liquidators only interact with the lending pool contract on AAVE. I’m open to ideas on this front.

Credit delegation is a little known feature of AAVE which allows users to give their borrowing power to another user. For example, if a gotchi had 10 ETH in spirit force collateral, it could delegate 7.5 ETH worth of borrowing power to you. That way, you can borrow 7.5 ETH worth of any asset from AAVE while your gotchi holds your collateral.

  1. Allow gotchis to take on debt
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I like this proposal. To you’re point increases the utility and further differentiates this project as being defi integrated. good thought

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