Vesu USDC Re7 rUSDC Risk Report
Summary
The Vesu rUSDC Re7 rUSDC market represents rUSDC deposits in Re7 Lab's Re7 rUSDC pool.
The pool enables a variety of collateral assets, including ETH, WBTC, USDC, STRK, to borrow Relend's rUSDC stablecoin.
It uses Vesu's official factory extension with Pragma price feeds.
The market's overall risk rating is 🟨 Medium.
Datapoints
Pool Risk
The "Re7 rUSDC" pool is curated by Re7 Labs, a professional risk curator with extensive experience and a long track record on other lending protocols.
The pool uses Vesu's audited factory extension which uses a robust Pragma feed and Vesu's public liquidation model.
Re7 Labs has the permission to pause the pool in an emergency situation and update various parameters including debt caps and liquidation loan-to-value ratios.
Given Re7 Labs' extensive risk curation experience and their operational setup, including a multisig and real-time monitoring with Hypernative, the pool risk is deemed low.
Datapoints
Rating
The proposed rating is:
- 🟩 Low
Asset Risk
rUSDC is a USD-pegged stablecoin that is issued by the Relend Network protocol. This protocol is developed and backed by the B.Protocol, a highly experienced and professional team with a long track record in DeFi.
Relend protocol implements a new stablecoin design, based on the rUSDC stablecoin which is mintable and redeemable with USDC on a 1:1 basis on Ethereum mainnet. Thus, rUSDC is fully backed and tightly pegged to USDC.
The Relend protocol further expands to rUSDC-x versions of the stablecoin that are bridged to and serve as liquidity for the respective chain, such as Starknet's rUSDC-stark. Isolated stability modules enable permissionless minting and redemption (on 1:1 basis with USDC) on Ethereum mainnet.
Smart contract risk
The Relend codebase (see links below) is open-source and audited twice by Certora and Fixed Point Solutions LLC (Kurt Barry).
Since it is a fairly new codebase without significant track record, a significant risk of unidentified bugs and vulnerabilities remains.
The rUSDC contract on Starknet is not verified on block explorers.
Counterparty risk
N/A
Depeg risk
rUSDC is a new stablecoin with very limited price history making it difficult to assess the risk of a depeg.
On the other hand, rUSDC is redeemable to USDC on a 1:1 basis motivating a "fundamental" value of 1 USDC per rUSDC and thus strong price stability.
Furthermore, in the Re7 rUSDC pool rUSDC is enabled only as a loan asset, and not as collateral asset, and uses the USDC/USD oracle price to mitigate temporary depegs due to (initially) low DEX liquidity on Starknet.
Datapoints
Rating
The proposed rating is:
- 🟨 Medium
Oracle Risk
The pool uses Pragma's USDC/USD price feed.
The Pragma oracle is a native Starknet oracle system that secures over USD 200m across all major projects on Starknet.
It is fully decentralized in that it does not rely on off-chain infrastructure. Instead, data providers directly push prices on-chain and aggregation is done by the data consumer directly.
Smart contract risk
Find an overview of the Pragma smart contract system here.
The Pragma smart contracts have been audited by Nethermind and both the source code and audit report are publicly available.
Price composition & source diversity
The oracle price is computed as the median over the most recent data points available for the various Pragma providers.
Oracle fail-safes
N/A
Re7 Labs actively monitors the pool and oracle feeds and in case of an emergency pauses deposits and withdrawals.
Datapoints
Rating
The proposed rating is:
- 🟩 Low
Market Risk
rUSDC deposits can be borrowed with any of pool's collateral assets, including ETH, wstETH, WBTC, STRK.
The pool enforces debt caps and liquidation discounts reflecting the on-chain liquidity available for liquidations.
Liquidations, facilitated by the official factory extension (see Section Pool Risk), are public and prioritize a rapid liquidation process.
The resulting market risk is computed using the Standard Market Risk Model.
Datapoints
Rating
The proposed rating is:
- 🟩 Low
Collateral Risk
The pool does not enable asset rehypothecation.
The proposed rating is:
- 🟩 Low