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Kollateral

Security Considerations

Here we’ll outline a few tips on interfacing with Kollateral while minimizing trust in its correctness.

Avoid storing funds in your invokable contract

Section titled “Avoid storing funds in your invokable contract”

Invokable contracts are safest when they do not store funds at rest. Ideally your contract will perform some atomic operation such as a liquidation or a refinance, and then transfer out any profit after repaying Kollateral. In this situation the most likely worst case would be to lose the profit of one’s atomic operation. All other cases should revert.

Add a safeguard limit for Kollateral reward

Section titled “Add a safeguard limit for Kollateral reward”

Further, the KollateralInvokable base class includes a 1% emergency check, which will revert if the effective Kollateral reward is in excess of this threshold. Adding your own redundant/more strict check could further increase safety.