Max Collateral Share

[robert-zaremba]

Summary

Limit exposure to a single token collateral.

• feat: add total collateral function and query #1094
• Proto for Max Collateral Share #1095
• ADR update
• Functionality update
• Tests

Problem Definition

Today, we only limit which tokens can be used as a collateral, but we don't protect the system to be exposed too much to any of the allowed tokens. This can lead to a recent Solend problem: https://decrypt.co/103489/solend-whale-108m-loan-nearly-crashed-solana

Proposal

Add MaxCollateralShare parmeter to the token registry. It should be a value in basis point describing the maximum use of a given token as a collateral. In any given moment, for every token t

total_collateral(t) / total_collateral() <= max_collateral_share(t)

Where total_collateral() is a sum of USD value of all tokens collaterized in the system.

NOTE:

There might also be restrictions on MsgRemoveCollateral of token B, if removing token B would cause token A to exceed 20% of system collateral value.

This is a good and valid point. The restriction will only hold when adding a collateral.

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