Weekly RiskDAO report 6 Oct ‘23

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

Summary

Markets are anemic as BTC and ETH hold the $27k & $1.6k levels.

Yield Protocol - a collateralized fixed-rate lending protocol on ETH and Arbitrum - has decided to shut down. The project is citing a lack of interest in fixed-rate borrowing and an increasingly challenging regulatory environment as the main reasons for the decision.

Voting is live for the Arbitrum STIP proposals. There are a number of Arbitrum-based lending protocols (eg Silo, Radiant) asking for $ARB allocations to incentivize activity.

LlamaRisk published a comprehensive report about CRV’s collateral risk across DeFi markets. This comes as Mich Egorov repaid all his Aave debt last week, primarily by minting crvUSD on Silo Finance (which is now the #1 market for CRV-collateralised borrowing).

Stablecoin monitoring

GUSD liquidity declined from $2.9m to $2.4m. sUSD liquidity also saw declines as liquidity fell from $7.2m to $6.6m. LUSD liquidity recovered from $5m to $5.9m. sUSD backing stayed steady around 400%. LUSD backing also remained largely unchanged at 250%.

There are no significant oracle deviations between DEX and CEX prices.

Watchlist

stETH remains the heavyweight collateral across Gearbox with a share of 59.8% (-50bps vs last week). The growing importance of stETH requires monitoring to avoid the build-up of significant cluster risks.

Pools summary (weekly comparison)

DAI

There have been no changes within the pool over the last couple of weeks.

Total pool size amounts to $3.6m. stkcvxcrvPlain3andSUSD is the #1 asset at $1.2m (unch), followed by yvDAI at $1.2m (unch) and stkcvxLUSD3CRV-f at $0.7m.

Total remains at $3.1m.

The pool remains predominantly collateralized by stablecoins.

USDC

There have been no changes within the pool over the last couple of weeks.

Total pool size stayed flat at $2.6m, with the largest collateral assets being stkcvxcrvPlain3andSUSD at $1.2m (unch), followed by stkcvxLUSD3CRV-f at $0.7m (unch) and USDC at $0.4m (unch).

This pool also remains largely backed by stablecoin assets.

Total debt also stayed static at $2.2m.

WETH

The pool amounts decreased from $11.2m to $11m. The largest collateral assets are stETH (from $10.5m to $10.3m), FRAX (unchanged at $0.4m) and yvWETH at $0.2m (also unchanged).

The pool is 94% collateralized by stETH.

Total debt has decreased from $9m to $8.8m.

FRAX

The pool’s credit account has been closed as of a few weeks ago.

WBTC

The pool has no active credit accounts. All active positions were closed several weeks ago.

wstETH

Demand for borrowing stETH continues to be subdued with no active credit accounts. This is a continuation from the previous weeks.