The Security Precautions Taken By The Team
Smart Contact Audits
The Pinjam Protocol is heavily based on AaveV2 and Geist Finance. The full audit report can be found here with no critical findings and all low level findings resolved.
Risk Management With Protocol-to-Protocol Lending
The team behind Pinjam Protocol has set up a unique monitoring infrastructure to monitor the underlying liquidity of the integrated protocols, creating a new metric`Collateralization Factor`.
Vault Info on Reserve Page
This means if the vault has $100 at worked in a yield source with $400 of liquidity, the collateralization factor is 400%.
The moment the collateralization factor drops below 150%, the vault will automatically start withdrawing from the yield source in order to avoid the risk of accruing bad debt and to ensure sufficient liquidity for Pinjam Lenders.
Any new Protocol Integration will go through a governance process.
Custom Oracle Backstop If Assets Depeg
The team has also created our own on-chain emergency oracle for the purpose of functioning when our main oracle is non-functional (at this moment, Witnet) and/or a depeg situation occurs for our assets.
Here's the reason why.
Right now, Witnet is pulling asset prices from exchanges which will be entirely unreliable when it comes to depeggings.
Witnet also does not properly monitor bridged assets (which is very crucial) and their price oracle can be faulty too.
Our on-chain emergency oracle will be pulling from Equlibre's price feeds which will be more accurate - thus ensuring that liquidations are executed as expected should depeggings occur.