1) When it comes to oracles,
you just have to make up your own damn mind
Conversation
Maybe a dumb idea, but shouldn’t the lending protocols use implied
volatility of the underlying collateral to figure out how much the user can borrow? Basically write an option to cya?
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We've chatted about this with teams. Most alts don't really have a liquid *IV* market, but lets say a desk uses some multiple of BTC/ETH/SOL IV or said alt RV, you have to balance UX experience for users to have dynamic collateral thresholds with platform risk.
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Also another attack vector now you can fuck with the IV
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Wouldn’t someone like jump have models for IV that look at liquidity? This attack exists for all assets, btc included. Just a matter of size.
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there are different, valid ways to model vol surfaces
in the absence of a proper liquid options market to derive IV properly you are at the mercy of model assumptions which can and will vary
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so for the reasons people have said I think you can't fully trust the vol calcs, BUT I think that doing the conservative thing of "assume your default model or the IV, whichever is worse" could help a decent amount