Weekly RiskDAO report 7 July ‘23

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


Crypto markets continue to experience upward momentum - albeit with the usual dose of volatility - driven by positive remarks from Blackrock’s Larry Fink and investor inflows of $330m over the last two weeks.

It’s “DeFi 1.0 season” led by $COMP (+96% over 14 days). The market narrative has shifted towards fundamentals that underpin the “OG protocols” such as Product-Market-Fit, sticky deposits, recurring users and limited token emissions.

MultiChain has been hacked for a total of $126m - half of which in USDC - with a very cryptic explanation of what happened by the team.

DeFi protocol Barnbridge is being investigated by the SEC.

Kaiko’s research team has published an in-depth guide into stETH, covering on- & off-chain liquidity as well as stETHs role for lending markets. Kaiko focuses the article on how reliable the stETH-ETH peg is and what developments could break it. The article investigates how $LDO incentives have helped bootstrap initial stETH-ETH liquidity on Curve and how deteriorating liquidity could break the peg. In addition, there’s now more stETH deposited on Aave v2 + v3 than Curve as users have been loop-borrowing ETH for stETH to arbitrage the yield differential.


RiskDAO is suggesting to Gearbox DAO to reduce exposure to GUSD and its derivatives. Over the past week, on-chain liquidity for GUSD has significantly reduced, causing a decrease of more than 30% in available Curve liquidity and creating an imbalance in the Curve pool, where 65% of the inventory is now GUSD.

Although there doesn’t appear to be a direct risk to GUSD’s price, and MakerDAO still holds $0.5B of GUSD in their PSM, the lack of DEX liquidity could make liquidation difficult in critical times.

It is advised to mitigate this risk by preventing further GUSD exposure, such as disallowing users to accumulate more stkcvxGUSD3Pool tokens.

Stablecoin monitoring

GUSD liquidity stayed flat at $1.9m. sUSD liquidity doubled from $16.7m $33.2m. LUSD liquidity fell from $20.8m to $17.2m. sUSD backing further improved from 370% to 390%. LUSD backing stayed flat at 266%.

There are no significant oracle deviations between DEX and CEX prices. The only deviation standing out is the sUSD CEX price which is 8.8% below the oracle price. sUSD is primarily traded on-chain and thus this deviation does not come as a surprise.


Over the last weeks, we highlighted how stkcvxcrvPlain3andSUSD has an outsized share within the collateral pool accounting for 40% at the top (currently sitting at 36%). However, stETH has emerged as the new heavyweight in the collateral pool with a share of 38%. Combined, these two assets now make up 74% of all collateral assets. This requires monitoring to avoid the build up of significant cluster risks.

Pools summary (weekly comparison)


The pool experienced no weekly changes.

Total pool size stayed flat at $8.6m. stkcvxcrvPlain3andSUSD remains the #1 asset at $6m (unchanged), followed by yvDAI at $1.2m (unchanged) and stkcvxLUSD3CRV-f at $0.7m (unchanged).

Total debt remained at last week’s level of $7.2m.

The pool remains predominantly collateralized by stablecoins.


Total pool decreased from $12.1m to $11.8m, with the largest collateral assets being stkcvxcrvPlain3andSUSD at $7m (-$0.2m), followed by stkcvxLUSD3CRV-f at $2.1m (unchanged) and stkcvxgusd3CRV at $1.2m (-$0.3m).

This pool also remains largely backed by stablecoin assets.

Total debt decreased from $10.1m to $9.9m.


The pool amount increased only by $0.3m to $15.7m. The largest collateral assets are stETH (+$0.8m to $14m), stkcvxsteCRV ($0.8m, -$0.4m) and FRAX ($0.5m, unchanged).

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

Total debt increased from $12.4m to $12.6m.


This pool has total collateral of $0.3m (unchanged), mostly in the form of yvDAI at $0.3m (unchanged).

Total debt stands at $0.2m, in line with last week’s level.


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


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