Non-standard functionality refers to custom token behavior defined outside of the ERC-20 standard. One example of non-standard functionality is rebasing, which allows for updates to a token’s balances and circulating supply based on certain external factors, such as target price or yield accrued. Integrating such tokens often requires custom implementation and can introduce unexpected behavior, so we recommended starting from the isolation mode if the community strongly desires to enable these tokens as collateral.
An infinite mint attack occurs when a hacker exploits contracts and mints a large amount of tokens. The hacker can then deposit these erroneously minted tokens as collateral and drain the protocol by borrowing other assets. Therefore, we also recommend isolating assets that are susceptible to this type of attack.
Given that the EURS whale account is supplying $1.7M EURS and borrowing $700k USDC, which suggests a relatively low risk from this account. In the event of liquidations, it’s likely that liquidators would redeem the liquidated EURS for EUR through Stasis rather than swapping EURS for other assets through DEXs. As a first step, we still recommend reducing the debt ceiling to limit further borrowing against EURS. We will continue to monitor the market and propose additional actions when needed.
For USDT on Arbitrum, the available liquidity of assets that can be borrowed is the limiting factor for both conservative and aggressive recommendations, rather than the circulating market cap. Therefore, the conservative and aggressive recommendations are the same.