Vesu Cash Alterscope CASH Risk Report
Summary
The Vesu Cash Alterscope CASH market represents CASH deposits in Alterscope's Alterscope CASH pool.
The pool enables a variety of collateral assets, including ETH, WBTC, STRK, USDC, USDT, to borrow the CASH stablecoin. It uses Vesu's official factory extension with Pragma price feeds.
The market's overall risk rating is 🟨 Medium.
Datapoints
Pool Risk
The Alterscope CASH pool is curated by Alterscope, a professional risk curator currently operating vaults on Euler and offering autonomous risk agents across various chains and platforms.
The pool uses Vesu's audited factory extension which leverages a robust Pragma feed and Vesu's public liquidation model.
Alterscope 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 Alterscope's expertise in assessing, monitoring and managing DeFi risks and their operational setup, including a multisig owning the pool permissions, the pool risk is deemed low.
Datapoints
Rating
The proposed rating is:
- 🟩 Low
Asset Risk
CASH is a USD-pegged stablecoin that is issued natively on Starknet through the Opus Protocol, a CDP system inspired by Liquity's LUSD.
The Opus Protocol and CASH stablecoin are relatively new, officially launched in September 2024, and thus lack a long track record, TVL, user base and price history.
Nonetheless, the protocol has performed without any incident and safely navigated through major market stress scenarios since its inception.
Smart contract risk
The Opus protocol smart contracts are publicly available on GitHub and have been audited by Trail of Bits, a top-tier auditing firm, as well as in a public Code4rena contest in January/February 2024.
However, the protocol was only deployed on Starknet mainnet in July 2024 with a significant code diff in the GitHub repository between the audits and the version as of July. Since contracts are not verified on public block explorers, it is not possible to verify the deployed version of the protocol.
Information on the existing audits can be found in the official Opus documentation here.
The Opus Protocol contracts are currently governed by a 2/3 multisig account.
The Opus Protocol contracts are not verified on block explorers.
Counterparty risk
N/A
Depeg risk
CASH is a relatively new stablecoin with only limited price history (about 3 months at the time of writing this report). In its first weeks, the price of CASH seemingly stabilized at a level slightly below its peg of 1.0 USD (around 0.995 USD) according to Coingecko.
Given its low circulating supply and liquidity, there exists a considerable depeg risk.
This risk is mitigated in the Alterscope CASH pool by enabling CASH only as a loan asset, but not as collateral asset, and using a fixed oracle price of 1 USD/CASH.
Datapoints
Rating
The proposed rating is:
- 🟨 Medium
Oracle Risk
The pool uses Pragma's FIXEDRESERVED/USD price feed, returning a fixed price of 1 USD (per CASH). The feed is thus not subject to Oracle manipulation attacks.
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 FIXEDRESERVED/USD-feed returns a fixed price of 1 USD and does thus not rely on actual spot price sources.
Oracle fail-safes
No autonomous oracle fail-safes and fallbacks are configured. Alterscope monitors and pauses pools manually in case of an emergency.
Datapoints
Rating
The proposed rating is:
- 🟩 Low
Market Risk
CASH deposits in this pool can be borrowed with a variety of collateral assets.
Insolvent borrow positions can be liquidated publicly and rapid liquidations are prioritized by the pool's factory extension (see Section Pool Risk).
The successful liquidation of insolvent liquidations relies on a number of factors including available DEX liquidity, accurate oracle feeds and the pool's risk parameters.
With CASH DEX liquidity being very low and the fixed oracle price feed, which does not necessarily reflect the asset's market price, the risk of failing transactions and accumulated bad debt is elevated.
Currently, the pool thus uses very moderate risk parameters including low LLTVs, high liquidation discounts and low debt caps.
The resulting market risk is computed using the Standard Market Risk Model.
Rating
The proposed rating is:
- 🟨 Medium
Collateral Risk
The pool enables borrowing of CASH with a set of collateral assets, which themselves all achieve a "Low" rating. Collateral rehypothecation is not enabled in the pool.
The proposed rating is:
- 🟩 Low