Liquidation of whales that have a huge collateral may not be possible
Summary
Currently liquidation logic does a full liquidation of an user, which might not be possible if the user is a whale and owns a huge amount of collateral.
Vulnerability Details
If we have an user that owns a huge amount of collaterall and is in a state when a liquidation is possible we might have insufficent funds in the Stability pool to cover that liquidation. This in turn can lead the position of the user to go into an insolvent state and resolve in loses to the protocol.
Impact
Portocol generates loses if a big debt can't be liquidate and it goes into an insolvent state
Tools Used
Manual review
Recommendations
Implement partial liquidations for users by luiquidating the user just enough to improve his/her health factor to be above the liquidation threshold.
Implement safeguards that limit user to a maximum amount to borrow(to insure the value is liquidatable by our stability pool)
Lead Judging Commences
StabilityPool has no ability to liquidate large positions due to all-or-nothing design - partial liquidation not supported, risking protocol insolvency
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