As a seasoned researcher who has witnessed the rise and fall of numerous digital assets, I find this downgrade of USDA from “Lowest risk” to “Low risk” by Exponential, an investment platform specializing in DeFi assessments, a prudent move.
The exponential investment platform that focuses on Decentralized Finance (DeFi) evaluations has adjusted the USDA stablecoin’s risk level from ‘Minimal Risk’ to ‘Moderate Risk.’
In this rating system, we evaluate the risk factors associated with Decentralized Finance (DeFi) protocols. These factors include the structure of the lending system, the quality of assets used as collateral, and the way decisions are made within the governance structure.
As a crypto investor, I’ve noticed a shift in our strategy mainly due to the significant dependence we have on the external protocol Morpho Blue. Over half of USDA’s collateral is held there, which has raised some concerns.
As a researcher studying digital currencies, I’ve recently come across Morpho, a novel money market that hasn’t seen extensive real-world testing like some others. However, its unique nature seems to introduce a possible vulnerability: a single point of failure.
As an analyst, I find myself compelled to reiterate a recent adjustment in our assessment, which aligns with a preceding event – the Euler hack incident in March 2023. In that episode, the security of Angle’s reserves was compromised, serving as a stark reminder of the inherent risks associated with external dependencies. The aftermath of that hack saw $17.6 million from Angle’s USDC reserves being impacted directly.
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2024-08-09 15:39