Get your money out of @MorphoLabs and @eulerfinance! Here's why. They take your USDC and give it out to insolvent protocols that leverage loop scam stables like xUSD by Stream Defi which just lost $93M of user money. The incentives are totally misaligned. Curators on Morpho and Euler want higher TVL, yields, and performance fees. They don't care about user security as they plug your money into literal ponzies. That's because users take on all the risks. Curators take the fees and Morpho + Euler brag about increasing TVL. It gets worst. Because the xUSD oracle price on such platforms was hardcoded to > $1, it ignored secondary market price movements when xUSD crashed. Why is this bad? Instead of selling xUSD to protect lenders of USDC into such pools, nothing happened. The hardcoded price prevented liquidations that would have protected USDC lenders. Since the protocol still believes xUSD is valued at $1 or above, anyone that provided USDC into such pools are stuck with bad debt, aka worthless xUSD, while the USDC was drained out. In other words, they took the USDC and lenders were left holding a big bag of nothing. The scam is now exposed. Those that took out the USDC have no reasons to pay back their debt since the collateral they posted (xUSD) was worth zero in reality. Stream Defi also paused withdrawals since the crash = insolvent. Why would anyone give up their USDC in the first place? Because they were promised up to 18% APY on USDC. That's 4x more than the going rate today. The APY was fake and created by leverage loops. They took your USDC, looped it 9 times to generate more xUSD and that extra "APY". Since more and more xUSD was created from thin air, its actual backing was lower than $1, despite what the oracle price said. Those late to exit, got rugged. Why is this bad? Because everyone from Morpho, Euler, and their curators knew what was happening. Yet, they kept this going until it imploded. They had no incentive to stop it. Morpho and Euler will argue they only provide a platform for curators and users to meet. After that, their job is done and have no responsibility. Really? I'd argue they enable and promote literal scams. The curator model is broken because it allows bad actors to profit from any reputation such DeFi platforms have. It was just a matter of time until it got bad. Like, share, and follow @duonine
