Solvency and Liquidations
In Grateful, subscriptions stay active only if the profile has enough balance. This means there are certain limitations on what the profile can do. If a profile wants to start new subscriptions or make new withdrawals, they need to have enough balance and expected flow to cover at least 7 more days (can be adjusted).
When the flow is negative and the profile is getting close to having zero balance, it enters a period called liquidation. This happens when the profile is only 3 days away (can be adjusted) from running out of funds. During the liquidation period, external parties are allowed to close subscriptions until the profile's balance is healthy again.
If, for some reason, the profile's balance goes negative, any excess amounts are compensated during the liquidation of a subscription. If there are still negative balances, they can be covered by using funds from Grateful's treasury for now. In the future, there might be incentive systems considered for these types of situations.
Last updated
