DeFi lending markets manage billions of user funds, with the top 2 platforms, namely, Compound and Aave holding over $20B of crypto-assets. At their core, they allow suppliers to deposit a set of assets, and borrowers to borrow them. The permissionless nature allows anyone to be a supplier and enjoy a supplier interest rate, however it also dictates that a borrower could only borrow against a collateral, and the platform becomes (partially) insolvent when a user debt exceeds his or her collateral. An insolvency event generates bad debt which comes at the expense of supplier deposits.