x/leverage: Small cap risk ( RV #12 )

[toteki]

Runtime Verification Audit Item 12

Manipulation of the prices of small cap assets (even their actual prices on the market) could create dangerously high collateral values for such assets which do not reflect their actual value. Lenders of such collateral could then borrow extreme amounts of other assets to drain funds from the system.

[toteki]

Current stance: Not a completely solvable problem.

Existing countermeasures:

• Careful consideration of token registry (governance)
• Setting collateral weights of small cap assets to zero (governance)

There may be additional measures we can take.