Dear Community,
Last week at 2021-09-07 15:06:06 (+UTC) I was liquidated. I had no clear indication that my vault would be locked at 180%, and due to a missing feature that was added only after my liquidation, I was trapped almost five hours, thinking there was a bug in the system, and unable to make the appropriate maneuvers to save myself from liquidation and lower entry. I am proposing to the community for my vault to be returned to me. It was confiscated with my holdings at the time of liquidation with 214.15 KSM and a 64,134 kUSD loan.
When I liquidated there was no clear representation of the consequences of going under 180% while still being over 160%. The collateral provided, in this case $KSM, locks at a requirement ratio of 180% to help guarantee stable coin protocol solvency, however I could not see any clear indication for this. My first alarm was set based on price when the ratio reached 200%, and from that point I was waiting carefully incase the price dropped to 180% which was when I was ready to pull some $KSM out to sell in order to pay off a portion of my loan and balance my safe ratio to avoid liquidation at 160%. When the ratio hit 190%, the collateral ratio colour changed to yellow. Then, when my ratio went under the 180%, where my second alarm was set for price, my vault was frozen without any sign or notification. As soon as my vault became locked, I immediately began counting everything manually because there was no display feature that could show me how much $KSM I should put in. While the price continued dropping, I transferred my DOT from the JS Wallet to the exchange and I swapped my DOT to the stable coin and I turned stable coin to $KSM and I transferred $KSM to my JS wallet and I transferred funds to my Karura blockchain, and I did this in less than fifteen minutes. At this time, I immediately began searching for urgent assistance from the community. I was thinking there was a bug regarding the frozen vault and that the Acala Team would know about it, and be able to sort it out. My discord was having connection issues but I asked around, across Telegram and Slack groups, and no one could explain why my vault was showing a yellow warning sign, while simultaneously being frozen. Moreover, no one seemed to have any idea about the consequences of going under the 180% ratio.
I never thought I was taking too much risk because I was in control of the situation, given my previous experiences. Even around 200% my portfolio health had been displaying a āSAFEā designation in green. My liquidation ratio was showing in red at 160% with no indication in between that the vault could lock. After 190% the collateral ratio colour code changed to yellow with āwarningā (and this display feature remained consistent without change even as the collateral ratio dropped under 180%). I never even imagined that the vault could lock at 180% ratio because there was no indication or sign. I still feel that yellow is a very confusing colour code to pair with a frozen vault for end users in UI especially without signage, because internationally yellow does not mean stop, yellow means you have time to prepare to stop or decide what you would like to do.
On 2021-09-07 10:22:12 (+UTC) I added my last emergency holding on the side of approx. 19.7 KSM . (you could see in blockchain) (Subscan | Substrate based blockchain explorer) and on Karura the system was showing my new ratio as 198%. However, when the transaction settled the ratio was reduced to 179%. My vault was still locked and so I continued searching for help because I was still thinking there was a bug in the system. This was probably due to real time oracle update but usually Ethereum base platforms have at least 20 min to 1 hour stable ratio, to not cause this type of scenario for end users. Iāve recreated this situation within a new active vault and when i add extra collateral, there continues to be a funny ratio play situation happening, making the user very confused. The numbers are still changing even when the price is stable- this is something extra that the team may want to investigate.
From 2021-09-07 10:22:12 (+UTC), it wasnāt until 2021-09-07 15:06:06 (+UTC) that I was liquidated- almost five hours after the point of my vault initially freezing, (you could see in blockchain) (Subscan | Substrate based blockchain explorer). 
When you look at these charts, you can see clearly that I didnāt liquidate from a constant price drop, nor from taking unnecessary risk, nor from lack of risk management. I just got locked because of unclear information and I could not maneuver during this time period. I wanted to close my vault when the price was around $370 - $380, I was planning to sell my holdings and actually get better entry around $300, buy the dip and create approximately around extra 40 - 50 KSM, but instead of that, I got locked in the system and the main sharp price drop came after 5 hours later. It was a painful 5 hours, and left me with a feeling of shock and confusion.
A couple of days after my liquidation, the team responded to my feedback by implementing a new feature to the vault that states, āClose Vault By Swapping Collateralā under 180%, because they saw the gap of the missing feature. After my liquidation, even the ambassador mentioned they had not been aware of the 180% requirement ratio locking mechanism. Had this feature āClose Vault By Swapping Collateralā been in place a few days earlier, I could have closed my vault in under a second. Moreover, If I had known that going under the 180% CRATIO would lead to freezing my vault, I would have set up my alarms for 220% as opposed to 180%.Still today users are not aware about this 180% locking mechanism, but at least they have the option to close their vault under that ratio now. I am very knowledgeable with other lending platforms and I would never give permission to drop under a 200% ratio. Previously, I have been able to manage my risk properly, maintaining control over the situation. A 200% and 210% ratio is very healthy for Ethereum based loans. If there had been clear indication that my vault would be locked at 180%, I could have swapped my extra $KSM to $KUSD under 1 minute, paid to the vault as $KUSD and avoided liquidation. Instead, I was locked in without any back up because I already put all my extra $KSM in the vault for an emergency situation. I never thought I was taking too much risk because I was fully in control; the screens are always open in front of me and I never leave my vault unattended with a 210% ratio anyway. Moreover, I always put up my ratio by swapping collateral over 300% when I leave my computer, or go to sleep while my alarm set in place with a clear exit plan.
The total of my loan @ 64,134 kUSD (12% liquidation fee of said 64,134 kUSD is 7696 KUSD, add the 7696 kUSD to my 64,134 loan and thatās a total of 71,830 kUSD) which got swapped for 214.15 KSM, that would be aprox ~335.65 kUSD per KSM. When liquidation happened, i had 317.9 KSM in my vault. After liquidation I received approximately 103.75 KSM back and the system basically sold my 214.15 KSM. I was so upset at that point because i felt abandoned and rekt. I had to sell my DOT holdings so I could add to my vault as KSM. I have read and researched almost everything about Karura since the beginning. I contributed to the Karura crowdloan and ACALA treasury events and I used the testnet prior to that; moreover, I use every option in real time in the Karura system right now. I am very knowledgeable and I am not a beginner; I have been in this space for a fairly long time. I can not even imagine if someone was a beginner, what they could do in that scenario. I believe our community will shape the world in the way we want and I serve unofficially almost every other platform for Dotsama ecosystem and ACALA community. I have not seen any information regarding funds being locked in the vault when going under 180% collateralisation, prior to this happening to me.
I am an organic gardener from the Daintree Rainforest, Far North Queensland, Australia. We run a community project called Platypus Dreaming Collective. We help purchase rainforest land that has been deforested and regenerate it to a natural state. I am a family man and father of two babies under three years oldā¦ I am not a gambler; Iām not a day trader either. I run five online businesses and I have 2 bachelor degrees and an MBA degree. I know how to manage risk and my vault did not liquidate because of a sharp price drop, nor by lack of experience with risk management. I managed to save my vault from a sharp price drop in the first place even under the circumstances, but I could not do any further maneuvers after that because my vault was locked and there was no other option to close my vault in that time. This has put me in hardship financially and mentally. I am fully aware of using Karura system at my own risk and in line with my risk management, however I do not feel that what happened to me was fair under these conditions. I am appealing to the community for my vault to be returned to me, when it was confiscated with my holdings at the time of liquidation with 214.15 KSM and a 64,134 kUSD loan. Iā am seeking community guidance with metta.
