RiskDAO report 10/11/22

Summary

Following the FTX saga, we are still in the middle of a prefect storm in the crypto markets.
However, the Gearbox pools do not have any exposure to Alameda research related assets (FTT, SOL, and alike). Some reports suggest that Alameda research holds significant amount of CRV token. However, the current Gearbox exposure to it is under $10, and it Gearbox offer very low leverage for it (25% liquidation threshold).

At the day of writing, the stable coins market is a bit volatile. With USDT and FRAX traded below the peg during most of the day, but currently they are traded back at $1.
LUSD is currently traded > $1.045, due to low buy supply, and increased demands to buy LUSD to close user positions during down turns.

Our stable monitor dashboard shows significant decrease in stable coin liquidity during the last week.

today

3/11/2022

The drop in LUSD liquidity is mostly technical because of the way Curve Finance works. When a token deppeg is increasing, it’s liquidity towards the converse direction get smaller.

However, the decrease in USDT and FRAX is significant. This mostly stem from the crunch of USDT liquidity. Following the USDT deppeg, a lost of FRAX was bought with USDT in the FRAX/3pool, and then sold to USDC at the FRAX/USDC pool. Which leads to a liquidity crunch of USDC in the FRAX/USDC pool.

Currently the liquidity is sufficient wrt the Gearbox risk parameters, and we continue to monitor it daily.

Pools summary

DAI

More than 99% of the pool collateral is in stable coins, and is not exposed to the market price volatility.

USDC

The pool has one brave user with a $450k long stETH position.
The rest of the collateral pool is almost entirely composed out of stable coin collaterals.

WETH

over 97% of the pool is composed from ETH based collaterals

WBTC

The WBTC pool sill has no borrowers

wstETH

The pool has 3 borrowers. And all 3 has stETH based collateral.

Summary

Current risk parameters are in par with our models.
We continue to closely monitor stable coin liquidity.

Additional stats, updated daily, are available in our dashboard at https://gearbox.riskdao.org/

3 Likes

Very interesting message. Thank you for keeping an eye on the stable coins. It is very important. Especially in quiet times like now.

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