Add Market: LINK

Congratulations everyone! :partying_face:

What a great community! Thanks everyone!!

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Is this TRiLeZ from Tribot?

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I’ve been spotted :eyes:

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Good to see talent in the crypto space!

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LINK:

  • Traded at a large number of exchanges: Binance, Okex, Coinbase, FTX, Houbi. Between them and legitimate others, the 24hr volume looks to be +$400m
  • DEX liquidity: Uniswap v3 ~$83m volume 7-day, Uniswap v2 $30m liquidity, Suhsiswap $63m liquidity
  • Notable: There are a few wallets with considerable LINK holdings. I think they are related to the team. I’ll try to find out.
  • FDV: $24B
  • Initial collateral factor: 50%

For reference: COMP

  • Traded at a large number of exchanges: Binance/US, Okex, Coinbase, FTX. Between them and legitimate others, the 24hr volume looks to be around $210m
  • DEX liquidity: Uniswap v3 ~$17m volume 7-day, Uniswap v2 $3m liquidity, Suhsiswap $14m liquidity, Balancer v2 $7m
  • Notable: The treasury holds 31.5% of minted COMP.
  • FDV: $4.5B
  • Collateral factor: 60%

Something very important to consider about link is the concentrated holdings. 45% of link is held in unverified contracts (I think by link team). This is $10+ B which would essentially allow the link team to take all of Compound held funds. I think limiting the amount of collateral Link in the protocol would be a good idea.

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I am not concerned but I appreciate you bringing up the point. It would be great if we had supply caps.

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A related scenario to consider is if a hacker gained control of the Chainlink project wallets containing this $10B worth of LINK. Today that hacker might be able to liquidate $100M via DEXes. But Compound offers a much wider exit ramp: by depositing the $10B LINK you could “borrow” $5B of liquid assets.

So allowing unlimited collateral means the Compound protocol inherits the security quality of the Chainlink treasury. About all you can say about that is “seems good so far”. But, by creating the exit route for funds, we would increase the incentive to hack their wallets by 50x or more.

At a minimum for our due diligence, we should know how many individual people would need to be compromised to allow this to occur.

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Here are a few ideas for mitigating the risk of a collateral exploit (this applies to any vulnerable collateral, not just LINK, especially those with centralized minting such as WBTC):

  • supply cap - this is a sure way to limit the damage of a collateral exploit, but has the big disadvantage of putting a hard limit on the size of the protocol.
  • supply inflow rate limit - for example, constrain the daily inflow of new collateral assets to some dollar value, possibly with a governance multisig override. This defends against the “hacker trying to quickly liquidate stolen assets” attack, while allowing unlimited gradual growth of the total value of protocol assets.
  • segregated markets - for example, create a separate set of pools where riskier assets could be supplied as collateral, and where stablecoin lenders would most likely be rewarded with higher interest rates to reflect the higher risk. Some downsides: fractured liquidity and complexity for users.
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