It occurs to me that this business with the the recent flip auctions might have been avoided if the protocol had a more straight forward way of selling the users collateral. Say for instance, just swapping the collateral for DAI using uniswap.
Presumably an alternative system could be conceived where the protocol makes use of the liquidity of these decentralized exchanges until it is exhausted before having to fall back and actually trigger an auction.
Curious if this has been discussed in the past. What are the potential downsides that i am not considering? Would we ever consider making use of the other defi projects in order to improve liquidation efficiency or mitigate liquidation risks? Would also love to hear any alternative liquidation systems that we believe might also be an improvement on what we have today.