What if borrow limits and collateral limits (liquidation limits) were separated on the backend for Venus for low liqudity coins like sxp & xvs. What I mean is:
SXP: Collateral factor (70%), borrow factor (50%)
If you have $1000 worth SXP supplied, you can only borrow $500 against it, while your collateral value is $700. That way, people can be protected from over-borrowing on illiquid coins by forcing a margin of safety, and can also prevent against malicious attacks as people won’t be able to borrow more than 50%
For coins like BTC, ETH and stablecoins, the collateral and borrow factors can be kept the same.
Through this, SXP & XVS holders will still be able to maintain a safe collateral level (70%) if they are using other supplied coins like BTC, ETH
This is just an idea, and I know implementation might be tough, but I’m curious to see what downsides there could potentially be to something like this.