Taker Ejection

Taker ejections considered necessary given:

  • Taker premium penalty is not calculated until they interact with the system to trigger it.

  • If a Taker never interacts with their position, their position can accrue penalty premiums which will eventually exceed their remaining balance

  • In such an instance, this may devalue bETH on a secondary market.

When a Taker’s accumulated premium and fees exceeds the size of their initial position, a Taker should be liquidated and have their position closed. Similarly to Cancellation, any Bonded tokens, including incentives, remain with the protocol (or may be used to incentivise the actor triggering the ejection).

Before closing the position, the first check is to see if the position is being closed because of the premium charged or because of the expired fee it may need to pay. If the first scenario is the reason, then the expired fee is set to zero, the Pools get priority over the Treasury. In the second scenario, a maximum fee is computed, such that no excess over the initial position is charged.

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