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BTC $75,383.61 -0.77%
ETH $2,325.21 -1.24%
BNB $621.84 -1.85%
XRP $1.43 -0.47%
SOL $85.26 -1.71%
TRX $0.3307 +0.79%
DOGE $0.0945 -1.68%
ADA $0.2473 -1.89%
BCH $439.89 -1.41%
LINK $9.19 -2.07%
HYPE $43.13 -2.69%
AAVE $93.53 -15.86%
SUI $0.9506 -2.06%
XLM $0.1693 +0.08%
ZEC $328.82 +1.38%

monad

Monad Co-founders: If a rate limit is set on collateral supply, today's rsETH event could prevent a loss of about 200 million dollars

Keone Hon from Monad Lianchuang stated: "I feel that the lending protocol for the liquidity pool should set rate limits on the supply of assets deposited as collateral. For example, if the current supply is 100 million and the supply cap is 300 million, then in the next 10 minutes, the maximum allowed increase should be to 110 million, rather than allowing a one-time deposit of the full 200 million. In reality, no one needs to complete such a large deposit all at once.This is important because when certain exotic assets are attacked, the impact depends on the scale of the exit channels for that asset. Especially in many cases where attacks belong to infinite issuance vulnerabilities, the scale of the exit that can be made essentially determines the upper limit of the attack losses. Lending protocols are often the largest exit channels. If a smart cap is introduced, where the initial cap is slightly above the current supply and is gradually adjusted to the real cap over several hours, it would have a huge effect. With such a mechanism, rsETH depositors could have avoided about 200 million dollars in losses.This also raises a point: the asset issuers themselves should support such mechanisms. If you are issuing redeemable tokens with redemption delays, you are not worried about hackers redeeming directly from you, but you need to compress the scale of external exit paths as much as possible without affecting normal users. Therefore, a high supply cap should be seen as a risk rather than a symbol of strength. For example, the Hyperbridge DOT attack did not result in a 100 million dollar loss because there were very few exit paths; the Resolv attack loss was 24 million dollars instead of 200 million dollars because the scale of the exit path limited the loss cap. This is an obvious principle, but there are still immediately actionable measures: audit the supply caps of all assets and lower the caps when unnecessary."
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