# Underwriting system

Technical details of the core underwriting layer is specified in the whitepaper

{% embed url="<https://docsend.com/view/df352jrc2rscajet>" %}

And the [docs](https://rammprotocol.gitbook.io/ramm/introduction/why-ramm)&#x20;

### Q\&A

1. **What if managers adversarially select bad instruments to supply to?**

   Collateral presented by the managers would be the first to be wiped out(akin to being 'liquidated' in margin trading), so they are disincentivized to do so. Also, a manager's borrowing power is a function of his reputation score(which has to be earned), so a manager with a low reputation cannot attack the system in a meaningful capacity.&#x20;
2. **What if I as an LP disagree with the managers on which instrument is worth supplying to?**&#x20;

   LPs can always buy protection via `shortZCB`. They can also lever up by buying `longZCB`.&#x20;
3. **How are the prices of longZCB/shortZCB settled?**&#x20;

   It is determined by an [attack resilient oracle ](https://rammprotocol.gitbook.io/ramm/prediction-market-and-amm-technical/instrument-return-oracles)that tracks how much returns the instrument has generated. &#x20;
4. **What if a manager pretends to be, or colludes with, a borrower and tries to approve a loan while not planning to repay?**

   We prevent such sybil attacks by enforcing a KYC process/ identity gate for the managers, along with the reputation system. More anti sybil prevention details are in our whitepaper.&#x20;

   Also, there is a time delay between the time a manager supplies to a lending pool and when a borrower can borrow from the lending pool, during which any malicious supply activity can be spotted.&#x20;
5. **Where does the shortZCB profit come from?**&#x20;

   longZCB/shortZCB are zero-sum -> It comes from the collateral used to buy longZCB.&#x20;
6. **What if a borrower buys shortZCB and doesn't repay?**

   Only vault investors can buy shortZCB as a hedging instrument.&#x20;


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