Weekly RiskDAO report 29 Nov ‘22

Weekly RiskDAO report 29 Nov ‘22

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


Wrapped assets are getting a lot of attention these days: Investors are afraid wrapped assets are unbacked and prices could depeg. Ren Protocol is at the center of the speculation given the affiliation with Alameda whose bankruptcy also shuts off Ren’s primary source of funding.

Vesta had quickly acted on the news, setting renBTC vaults to “remove only” and closing the vaults. Other lending protocols that accept renBTC collateral (eg MakerDAO) similarly stopped renBTC deposits limiting potential contagion.

Last week saw some FUD w.r.t. a whale position on GMX and whether it could rekt GLP quickly. However, this specific event had no direct impact on GLP’s collateral quality or the stability of $VST.

Aave was exposed to a loop-borrow & -trade scheme that left the protocol with $1.8m in bed debt. This event is noteworthy as it created a material increase in Aave’s bad debt. The root cause for this incident is lack of borrow caps and the ability to configure an LTV (MCR) value per collateral and debt assets. Two features that do exist in the Vesta protocol

Dashboard Highlights

The cap utilization of gOHM and sGLP are significant at 89.1% and 99.3% respectively.

“VAR on Worst Day” is at $8.75k mainly from the gOHM vaults. This means that Vesta Protocol would accrue c. $9k in bad debt, if ETH re-experienced its worst historical price drop.

$VST weight of the VST-FRAX pool is at 65%.

gOHM remains the #1 collateral asset accounting for 56% of total collateral base, followed by sGLP (31%).