Summary

USDz minting does not enforce proper collateralization.

Vulnerability Details

The PerpsEngine mints USDz for profitable trades without verifying that the MarketMakingEngine locks equivalent collateral.

Impact

USDz could depeg if unbacked tokens flood the market

Tools Used

Manual audit of PerpsEngine.sol and MarketMakingEngine.sol

Recommendations

Enforce collateral checks in mintUSDz() and implement real-time collateralization ratios