Just to be totally clear, do I understand correctly that you evaluate risk of undercollateralization as very low?
I do believe undercollatarlization must be avoided at all costs!
But I also realize that
a) black swan isn't as bad as world armageddon, but in fact can be recovered through BSIP18 and
b) the risk of *OVER-ALL* undercollateralization is much smaller than the risk of an individual position going below 100% collateral.
Point b) is very crucial to understand and while I do not believe we should bail out individual short positions with too little collateral (but instead would rather penalize
them), I do see a fine line between risking the entire asset through global settlement just because of a single position being undercollateralized and temporarily tune
price feeds to potentially "hide" a few undercollateralized positions (that will have a margin call that can be filled!).
Again, to me, this is a short-term solution and I would prefer any undercollateralization to be *obvisous* and *transparent*, but we first need to fix the backend to provide us
with the necessary means to get there. In the mean time, plenty of discussion is being done to figure out the "how"