Key Takeaways
As decentralized money market protocols continue to grow in value locked, there have been a number of optimizations proposed for improving capital efficiency.
One set of proposals from Euler Finance and Mars Protocol is to have an interest rate curve that is a proportional-integralderivative (PID) controller.
This paper demonstrates that attacks on proportional and proportional-integral controlled interest rate curves allow one to manipulate the interest rate curve to take a higher proportion of the earned yield than their pro-rata share of the lending pool.
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