@witcheer
CDPs are quietly solving their biggest existential problem with RWAs
// what I see as a core issue:
traditional CDP = you lock ETH, borrow stables. when ETH crashes 40%, so does your collateral. when the entire market nukes? every collateral asset dumps together.
correlation = 1.
your liquidation cascade triggers everyone else's liquidation cascade.
this is how protocols die in bear markets.
// enter RWAs and specifically tokenized T-bills:
US Treasury yields literally don't care if ETH goes to $800 or AVAX dumps 60%. different correlation regime entirely.
that means that there is a low correlation = your aggregate collateral value stays stable even when one asset class implodes. the protocol can survive the volatility that would liquidate you individually.
and as a bonus, RWAs generate real off-chain yield (T-bills paying X%) → builds surplus buffers continuously → mechanically offsets bad debt when liquidations don't cover losses.
if you are a CDP protocol, integrate RWA collateral.
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