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["pile"] Non-liquidation of non-indebted pools #7

Closed quinn-dougherty closed 2 years ago

quinn-dougherty commented 2 years ago

Description

Cascading liquidations: how bad is it and what can we do to stop it? Cascading liquidations is when liquidation of one asset causes other assets to liquidate, causing propagation of liquidation across the pools in the DEX. The following property is an attempt to articulate a solution:

We would like for it to be not possible to liquidate a vault that is not in debt

Deliverable

Still can't think of a way to do this informally / at the spec level. It's probably possible to do formally with respect to implementation code.

Notes

Youtube channel Finematics calls this a "Systemic risk"

quinn-dougherty commented 2 years ago

Comment in src/postamble/fv.md is the extent to which this will be covered in audit.

In the future, we may reopen this issue and put it on the cross-repo fv board