Imagine this terrifying scenario: a small coin contract with a Time-lock backdoor. The project team lurks for 3 years, then suddenly activates the backdoor to mint 10 billion tokens for themselves. They then dump these worthless tokens into a lending protocol as collateral and borrow out all the stablecoins in the pool. The actual collateralized lenders are stunned—they can't borrow any money; depositors are confused—the pool is left with only worthless tokens. This is the fatal flaw of the cross-margin mode.

Why does this happen? Because the security of a lending protocol depends on the worst collateral. As long as you connect a problematic asset, the risk of the entire system is lowered. This is not alarmism, but a fundamental shortcoming that multi-asset collateral protocols must face.

How to prevent it? The key words are **asset isolation** and **debt ceiling**. If a lending platform divides its products into "core zone" (mainstream coins like BNB/ETH) and "innovation zone" (small coins/LP tokens), conservative players should stay far away from the innovation zone. The reason is simple—risks there are not only higher but also more contagious.

Look at the role of the debt ceiling: each collateral type is limited to how much can be borrowed. This is equivalent to setting a destruction cap for each bad actor. Even if they commit malicious acts, they cannot damage the entire system. This is the true meaning of risk isolation.