Partial return of funds liquidated at 7% premium causing 70% loss of funds

Dear GEAR DAO Members,

My username is star4441 in Discord and I am a new user to Gearbox and heard about the protocol on Twitter. I decided to invest around 220k in the newly released sUSDE-PT strategy looping with 10x leverage on the Plasma Chain. Within just a few hours, I had been liquidated for 70% of my portfolio due to the extremely high 7% liquidation premium.

Summary of what happened:

Withdrew funds to purchase more sUSDE-PT ( Left 7 days margin in the credit position). Liquidity was very thin on Pendle so as I purchased more, it pushed down the price. Of the 220k principal:

66k (30%) was returned 140k (63.6%) was obtained by the liquidation bot (0xbd796DdE46DEB00B1840e7be311eF469c375c940) owned by the GEAR DAO 14000 (6.3%) was burned from slippage during the forced liquidation

This was a catastrophic and devastating moment as I realized 70% of my funds had been lost. At such a high liquidation premium, I stand almost no chance of ever recovering the original amount I had. (To be honest, I completely broke down after realizing this... )

Furthermore, (possibly due to this incident), the rules have been changed for the sUSDE-PT curated by Invariant Group:

• 3.5% liquidation premium: Paid out to incentivize liquidators and protect lenders. • 3.5% liquidation fee: Reserved during liquidation, but can be returned to the user by invariant if no bad debt occurs and the liquidation completes successfully.

In total, a 7% fee will be applied at liquidation, but any unused portion beyond the fixed 3.5% can be refunded for this market by the curator. This ensures lenders and liquidators stay protected while preventing unnecessary losses for borrowers in case of bad liquidation.

Seeing as the new rule change was put in place recently to be able to return 3.5% (half) of the premium and there is no bad debt in my case, I would greatly appreciate if the GEAR DAO would vote in favor to partially return funds. I understand that the liquidation was my fault but am asking for a reasonable liquidation premium to be applied such that I would not lose 70% of my portfolio in just a few hours!

Since this is technically a request for clawback, I am willing to give up an additional 10% of funds to the DAO and kindly request that just 40% of the $140k obtained by the liqudation bot ($56,000) could be returned to my wallet. This would do a lot to help me move on from such a catastrophic and destructive event.

(I am honestly still in shock at what happened. Thank you to many members of the Gearbox Team & Invariant Group for the kind words and sympathy.)

Lastly, thank you GEAR holders for your consideration!

Star