HIP-3: Suspend zTSLA ahead of Stock Split
Suspend zTSLA ahead of their stock split on August 25th, 2022
Type: Horizon Improvement Proposal Date: August 13th, 2022 Status: Draft 1 | Completed
Summary
Temporarily suspend trading of zTSLA ahead of the upcoming 3-for-1 stock split while the current zTSLA supply is 0 to avoid any user or global debt pool risks and resume trading zTSLA after the stock-adjusted price has traded on the traditional markets.
Specification
Suspend the trading and transfer of zTSLA in the protocol via the suspendSynth function
Resume trading and transfers of zTSLA in the protocol via the resumeSynth function on August 25th, 2022
Motivation
Tesla has announced a 3-for-1 stock split and the trading with the new stock-split adjusted price will begin on August 25th EDT. The stock split adjusted price will be significantly lower than the pre-adjusted price and will have a direct impact on any user who holds the zTSLA zAsset on Horizon Protocol since oracles currently do not have the information or functions to allow for automated stock splits of the zAssets.
Users who hold zTSLA through the stock split will be at risk of having the value of their zTSLA holdings be significantly devalued, which could limit their ability to manage their C-Ratio since the value of their zAsset holdings will be reduced.
Currently there are no zTSLA holders, so by suspending zTSLA in the protocol it will eliminate any potential risk for users to be exposed to the stock split price change and also eliminate the need to take any further actions to protect against any potential impact to the global debt pool.
Potential Risks
The implementation of this HIP might come with some risks, including the following:
May introduce inconvenience for some users who wish to trade zTSLA before August 25th
Considerations
Additional thoughts we should take into consideration:
In a future HIP, we will need to further explore and create rules around how to handle future stock splits to minimize disruption and set up a system to mitigate potential risks.
Feedback & Questions
If you have any questions or concerns, please do not hesitate to reach out.
