Proposal: Phase-Out Plan to Delist BAL from WING Flash Pool on Ethereum

Discussion
1

Proposal Overview

To maintain the stability and capital efficiency of the Wing Finance protocol, we propose a phased removal of BAL from the WING Flash Pool on Ethereum.

This proposal introduces a two-week transition period to gradually reduce BAL’s risk exposure, allowing users sufficient time to adjust their positions before full deactivation.

Adjustments to BAL Parameters in WING Flash Pool (Ethereum)

Phase 1 (3 days) – Partial Adjustment

  • Reduce the Collateral Factor of BAL by 50% (from its current level)

  • Increase the Reserve Factor to 100%

Phase 2 (next 3 days) – Full Deactivation

  • Set the Collateral Factor of BAL to 0%

  • Maintain the Reserve Factor at 100%

  • Disable Supply and Borrow functions for BAL in the WING Ethereum Flash Pool

Reasoning

The liquidity and utilization of BAL in the WING Ethereum Flash Pool have declined significantly, leading to:

  • Reduced market depth and higher price volatility

  • Increased risk of inaccurate collateral valuation

  • Lower efficiency in lending and borrowing activities

Given these conditions, continuing to support BAL as a collateral and borrowable asset introduces unnecessary systemic risk.

2

This rollout feels reasonable, at least it’s not a sudden shutdown

3

BAL liquidity has been weak for a while, this was kinda expected

4

Giving a transition period is the right move, users have time to react

5

Nice to see risk being managed proactively instead of after things break

6

Feels like users always end up paying the price for these decisions

7

3 + 3 days feels a bit rushed, not everyone can adjust positions that fast

8

Makes you wonder how the risk was evaluated when BAL was added in the first place

9

Setting collateral factor to 0 sends a clear signal, no ambiguity

10

In current market conditions, reducing risk is the right call

11

Better to remove low-liquidity assets than keep pretending they’re fine