Idea: Implementing Only Isolated Lending Pools
An outstanding protection against hacks and other bad events is to have only isolated lendig pools. Besides, it is very important that every isolated lending pool only has two crypto currencies. For example you can only use in one lending pool PAXG as collateral and USDP as debt. In another lending pool you can use USDP as collateral and PAXG as debt.
Like OpenLeverage (https://openleverage.finance) does it.
Such a lending system which consists only of isolated lending pools is much more resilient against events like hacking attacks or other events which can lead to that the protocol can become “insolvent”. For example planet finance’s protocol became “insolvent” due to a different raeson than a hack. Due to the collaps of the Terra protocol planet finance’s liquidators were unable to liquidate positions correctly when the Terra chain was halted and Chainlink stopped price feeds abruptly. As a result, planet finance’s debt was higher that its assets an depositors were not able to acess their deposited cryptocurrencies, exactly like the hack occured in our protocol. In both cases a purely isolated lending pool would have sgnificantly limited the losses of these two protocols.