Skip to content
New issue

Have a question about this project? Sign up for a free GitHub account to open an issue and contact its maintainers and the community.

By clicking “Sign up for GitHub”, you agree to our terms of service and privacy statement. We’ll occasionally send you account related emails.

Already on GitHub? Sign in to your account

Borrowed assets with negligible value round to zero collateral tokens seized #209

Open
jflatow opened this issue Jul 7, 2022 · 0 comments
Labels
quirk This issue discloses a quirk in the protocol

Comments

@jflatow
Copy link
Contributor

jflatow commented Jul 7, 2022

In v2 (this protocol), the more a borrowed asset falls in value, the less collateral cTokens are seized per unit of borrow. Due to discrete math, the number of seized tokens will reach zero before the price of the borrowed token reaches zero, meaning the incentive to liquidate will vanish. For a normal range of asset decimals (e.g. 6-18) and prices, this is generally not an issue, as liquidation should occur far before the borrowed asset price reaches the critical value (which depends on decimals of both the borrowed asset and collateral asset being seized). However, care should be taken when listing assets to avoid a potentially dangerous situation.

Sign up for free to join this conversation on GitHub. Already have an account? Sign in to comment
Labels
quirk This issue discloses a quirk in the protocol
Projects
None yet
Development

No branches or pull requests

1 participant