Euler made me nervous...100% borrow utilization
I was checking my Euler BSC position lending USD1 in the Re7 Labs Curator Vault and noticed extremely high APY, which got me excited for a little bit until I started thinking about the ramifications of bad debt socialization. This particular vault has "Bad Debt Socialization" enabled, which means if borrowers are unable to pay back debt or lenders don't supply collateral in large enough amounts to put the utilization ratio back to a healthier level, then losses may be socialized to all lenders of that vault, causing potentially large losses. I managed to withdraw ALL of my deposited collateral through several transactions as any small amount of liquidity became available. I tracked this by watching the Contract Events directly on the vault's smart contract. Luckily, I walked away with significant profit for a stable lending position, but the 100% utilization the vault reached caused some anxiety. I plan to reenter this lucrative vault once utilization ratios fall back to a healthier percent, but will be more actively watching this from now on. @David Zimmerman have you, or any of you ever ran into such a situation where you ended up taking significant losses due to bad debt? I got nervous about my collateral potential getting slashed since I noticed Euler does not provide explanation about how or when the debt socialization actually occurs besides it being enabled.