Weekly RiskDAO report 30 Dec 22

All referenced data can be accessed directly on the Gearbox dashboard by RiskDAO.

Summary

Avi Eisenberg, prolific DeFi exploitooorr, got arrested in Puerto Rico. He is formally charged with market manipulation as part of the Mango Markets exploit. The entire affidavit can be found here and includes details on how Avi Eisenberg operated, including KYC fraud.

Over Christmas, Defrost Finance (a leveraged yield trading protocol on Avalanche) got exploited for $12m. The team says it got hacked and the attacker used flashloans to withdraw funds of v2. In a separate attack, the hacker stole owner keys for v1. However, security accounts like PeckShield found on-chain evidence that the team added a fake collateral token and a malicious oracle address in order to drain the pools. Certik also suggests it is an exit scam and so does DefiYieldSecurity.

In a detailed blog post, DeFiYield Security provides a comprehensive account of events that led to the exploit. The security researchers also suggest the Defrost-team was involved in DeFi protocol PhoenixFinance/FinNexus that suffered a similar rug pull.

Defrost Finance started offering a 20% bounty for the return of the funds. In a further twist of events, Defrost has announced they recovered the stolen v1 funds and will implement a reimbursement plan.

Stablecoin monitoring

GUSD liquidity is hovering around the $15m-mark. sUSD & LUSD backing is steady around 420% and 230%, respectively.

DEX liquidity for all stablecoins remained largely unchanged.

Pools summary (weekly comparison)

DAI

Total pool size remains unchanged at $20.9m. The two largest assets are stkcvxcrvPlain3andSUSD ($9.98M) and yvDAI ($5.32M).

The pool remains predominantly collateralized by stablecoins.

USDC

Total pool collateral remained stable at $31m, with the two largest collateral assets being stkcvxcrvPlain3andSUSD ($16.58M) & stkcvxLUSD3CRV-f ($4.71M).

This pool also remains large backed by stablecoin assets.

WETH

The pool experienced a marginal increase from $22m to $22.6m, driven by stkcvxsteCRV. The two largest collateral assets are stETH ($10.88M) & stkcvxsteCRV ($6.05M).

The pool remains collateralized by mostly ETH or staked ETH assets.

WBTC

No material change compared to the previous week. Total collateral pool size stands at $0.11m and is dominated by WBTC ($71k).

wstETH

No material change compared to the previous week. Total collateral amounts to $0.86m which is entirely backed by stkcvxsteCRV.

Summary

Current risk parameters are on par with our models.

We continue to closely monitor stablecoin liquidity.

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