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Risk Curation @kpk_io | Defipunk arc 🌱 Science / biotech PhD nerd 🤓
🌍
Joined March 2020
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Gm 🥸
🎙️ New @edge_pod 🤷♀️ Understanding The Risky Business of DeFi’s Risk Curators 0:00 - Intro 5:34 - History of kpk 9:38 - What's the job of a risk curator? 13:53 - Permissionless lending markets vs vaults 24:23 - What happened with Stream and xUSD? 34:07 - How do risk curators
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Nice overview, but Morpho curators can guarantee liquidity, just not how most think. It takes automation and internal caps few users ever see. That’s what separates curators who actively manage risk from the rest. The ones who react fast and allocate smart stay mostly liquid.
1/ Every architecture involves tradeoffs. Good design allows you to design a system where, for every unit of risk you take, you earn the most reward, and for every unit of reward you take, you incur the least risk. From a liquidity risk PoV, Morpho's model is suboptimal.
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@kpk_io @GearboxProtocol @ETHPlus_ @reserveprotocol That didn't take long - you bunch of weekend degens 🔥 now back to growing the available ETH on the lending side! It's still one of the most excellent passive and lower risk ETH yield sources at the moment, at >6% APY
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🔒 The Balancer hacker’s funds are frozen on @gnosischain 👏 The exploit largely failed on Gnosis, and the attacker was unable to bridge out the stolen assets. A soft fork already took place, and a hard fork is on the way to recover everything Kudos to all parties involved!!!
The last four days have been critical for Gnosis core team Following the Balancer hack, we needed to take action to ensure @gnosischain achieved its low-risk defi goal It was the most stressful operation I've ever experienced, both personally and professionally ↓
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Just shipped a new interest rate model for our @kpk_io ETH @GearboxProtocol market to serve LST loopers better. The best-kept secret in DeFi now has room to loop 100 more ETH+ (@ETHPlus_) by @reserveprotocol. Earn >50% APR on your ETH. You're welcome 🫡
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Crime season, innit? Good reminder to be careful which "tokenized hedge fund" you interact with. It's not in their best interest to represent the truth
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Join us in 🇦🇷 for talks like 'Curation in DeFi' - with speakers from @ethereumfndn @kpk_io @LineaBuild - and a great assado 🥩 👇 rsvp below
Scaling DeFi: Buenos Aires Edition 🇦🇷 Join us for an exclusive event, co-hosted by @safe @HypernativeLabs @gnosischain & @Balancer — panel discussions, Argentine asado & networking. 🗓 20th November 🔗 Register here → https://t.co/oECdDpyIwZ
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This is basically best case scenario for deUSD holders and worst case for lenders. Means lending against deUSD essentially makes you a Stream creditor. Wild to see how in many cases lending against these assets turns out to be riskier than holding the assets.
Elixir has worked tirelessly over the previous 48 hours and has successfully processed redemptions of 80% of all deUSD holders thus far (not including Stream). As it stands now, Stream holds roughly 90% of the deUSD supply (~$75m), while Elixir holds a similar proportion of its
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Stream’s First Casualty: deUSD 1/ After Stream disclosed a $93M loss in user funds, Elixir’s deUSD and sdeUSD collapse became inevitable. Elixir was key in Stream’s recursive xUSD minting loop and held $68M in USDC exposure to Stream, representing about 65% of deUSD’s backing.
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@MorphoLabs Update: the situation has largely normalised👌 @SteakhouseFi, @MEVCapital, @gauntlet_xyz and @ClearstarLabs vaults are liquid again. High borrow rates prompted loopers to unwind, easing utilisation across many isolated markets. Curators were able to restore liquidity for those
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🍿>$750M stuck in @MorphoLabs vaults and counting... Time for curators to step up and show their true colors
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>In these times, it's easy to fall into moving too much into the risk curve Hard agree. No need to chase exotic stablecoin loops, when the underlying assets aren't solid You'll outperform in the long run. No need to rush into the next Luna
HI I'M RETARDIO HERE ARE MY THOUGHTS I think USDai will do very well. I don't like the fact that it's a GPU hardware loan book wrapped in a stablecoin/index, but for now, they segregated the risk for USDai holders (vs sUSDai), so it's okayish. I don't want to pay the premium to
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@StreamDefi Hope you got out on time, anon🫡 Withdrawals halted, xUSD depegged, lenders trapped https://t.co/zKTz4Q5cgv
Stream Finance halts withdrawals and deposits after $93 million loss disclosed
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@StreamDefi Other creditors have private deals to redeem xUSD at a 1:1 ratio, which won't be possible for the majority of people. It's only a matter of time until the xUSD ERC4626 NAV price gets 'corrected' to the real one, and liquidations take place. https://t.co/fy1FtGuFUx
During the past 24hrs we have heard concerns around Stream Finance' xUSD. Elixir has full redemption rights at $1 with Stream for its lending position. We are the only creditor with these 1-1 rights. deUSD remains fully backed and Elixir is beginning the process of unwinding
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🚨Anyone in Euler or Morpho vaults by Hyperithm, Exilir, Telos or others with exposure to xUSD (@StreamDefi) or looping themselves ---> GET OUT NOW WHILE YOU STILL CAN Liquidations are coming! Keep your stables ready for better vaults that are coming soon or ... buy the dip😉
@StreamDefi tl;dr One stablecoin depeg or exploit and they are toast 🥵
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Balancer v2 got hacked for ~$70.6M. Their team is working with security experts. 6,587 $WETH ($24.46 M) 6,851 $osETH ($26.86 M) 4,260 $wstETH ($19.27 M) Balancer forks like Beets on Sonic seem to suffer too. Potentially BEX on Berachain.
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Elevate your yield without elevating your risk. The @kpk_io Permissionless pool is now delivering 3X the returns of legacy pools while utilising the same battle-tested Gearbox infrastructure. Migrate your WETH to the kpk pool and maximise your returns. ↓
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all these incestuous self-backed ponzis rn: if you are lending to a vault with any exposure at all to this circus for anything less than 50% APR, you are getting fucked and should really reassess your entire strategy. you can get 7% for lending against solely cbBTC (Morpho
Now that people seem to be paying attention to what's actually behind the yield coin meta, few more fun facts for you. The Stream xUSD wallet holds 60% of the outstanding xUSD all of which is levered up. While the comingling of funds between their products make it impossible to
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Is it house of cards? Yes Be careful when selecting your curator or yield vault, anon To be continued.... 🍿
Is Yield Fi's yUSD yield stablecoin unbacked? Are liquid vaults participating in illiquid lending deals? Is the whole house of cards pushing TVL to new protocols with unknown risks? We leave it for you, dear reader, to decide in this edition of Spicy Sunday. YieldFi's YUSD
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