Tiago Cruz

Wise words... Traders should listen this

@kpk_io or the art of doing things right when the curator world seems to be burning down...

@0xfluid and @JupiterExchange i'm sure that if you guys introduce Smart Debt this will hit 500M TVL in hours....

"TimelockQueued - Admin Transfer - Execute window opens in 7 days" teraswap.app

@0xKolten I know... not counting with Aave Labs.

@TeraHash Just to clarify: Aave Labs built V3 and was the original technical contributor.

So... Chaos Labs is stepping down from Aave's risk mandate. BGD Labs ended theirs on April 1st. The last two original V3 technical contributors exited within 5 days of each other. Wild!!! 👇

@StaniKulechov x.com/TeraHash/statu…

We respect the decision of Chaos Labs to step down as one of the two risk managers for the Aave DAO. We want to thank Chaos Labs for their work over the years. They have been a valuable partner to the Aave DAO, and their contributions have helped Aave grow and mature. There is no disruption to the Aave Protocol, its smart contracts, asset listings, or network deployments, and we will work closely with Chaos Labs during the offboarding process. Aave operates with a two-layer economic risk model that has been managed by Chaos Labs and LlamaRisk. While this model does create tension between risk managers from time to time, we believe it has been valuable in safeguarding Aave. We strongly support maintaining a two-layer approach and will continue supporting this model, alongside an additional technical risk layer managed by Aave Labs. Over the past weeks, we held discussions with the Chaos team regarding next steps, as Chaos was exploring winding down its risk consultancy services business (and had already begun winding down some agreements with other protocols). We were generally supportive of a 2× increase in their risk management payment to $5M, but not supportive of $8M without a separate addendum at a later stage if the workload proved higher than anticipated. What we did not support were other elements of the proposal, including setting Chaos Labs as the sole risk manager and using Chaos Labs price oracles instead of Chainlink on all new deployments, as well as adopting Chaos Labs vaults as the default vaults (which are not yet audited) for all B2B integrations. While we do not see issues with these Chaos products or their future viability, we strongly believe that, given the scale of the Aave protocol, it should maintain at least a two-layer risk management model and vendor lock-in free vaults. Additionally, given the strong track record with Chainlink, we prefer to continue supporting Chainlink for price oracles, which our users are currently more comfortable with at scale. Regarding Aave V4, the architecture introduces isolated risk markets through Spokes, new liquidation logic, and governance-controlled parameters that give the DAO more granular control over how it manages risk across different markets and assets. We held multiple risk calls with Chaos Labs employees in attendance well before V4 went live, and the feedback we received during those sessions does not align with the concerns expressed in their post. For the immediate future, Aave Labs will work closely with LlamaRisk to ensure a smooth transition and uninterrupted risk coverage for the protocol. LlamaRisk already serves as a risk contributor to the Aave DAO and has deep familiarity with the protocol’s architecture and parameters. We support LlamaRisk increasing their budget to accommodate this additional workload and expanding their team as needed. Aave Labs will also contribute engineering and analytical resources wherever necessary to support this transition. We also want to thank the entire Chaos Labs team for their contributions over the years, as they have helped bring the protocol we built into its current level of maturity.

This isn't about who's right. It's about operational risk concentration in the largest DeFi protocol ($26B+ TVL) during the most complex transition in its history. The next 6-12 months are the test. If Aave Labs executes without incident the market moves on. If not, the cost will be orders of magnitude higher than what retaining these teams would have required. @StaniKulechov

The protocol enters the V3→V4 transition (dual operation, new codebase, different liquidation logic) without the teams that built and operated V3. BGD has a $200K security retainer through June. After that V3 incident response coverage is uncertain. Aave's treasury holds $140M. Labs recently approved $50M in self-funding. The constraint is not capital - it's governance and prioritization.

@miguelweb3 Thank you, obrigado !

@TeraHash nice one Tiago, bom post

here's what stays the same with usde backing: > new initiatives will sit alongside the existing USDe backing to reduce concentration in any single strategy > the basis trade remains the core pillar of USDe’s backing, and the product’s architecture and redemption mechanism are unchanged > reporting+attestation infra will scale with the backing’s composition (transparency) w/ proof of reserves staying unchanged* > all initiatives have been (or will be) independently assessed + formally approved by the Ethena Risk Committee (publicly available on our governance forum) > commitment to operating within a defined, publicly disclosed risk framework so that the community can evaluate and hold us accountable *additional reporting initiatives to follow

Regarding the decreased verifiability why not implement a real-time attestation system? Not just a simple monthly proof-of-reserves but something more granular. Think along the lines of what Maple Finance attempted with institutional lending: on-chain publication of aggregate terms (average collateralization, duration, counterparty risk rating), with periodic attestations from an independent auditor alongside a circuit breaker mechanism that limits exposure to any single CeFi counterparty to a fixed percentage of total collateral.

An interesting addition would be a dynamic rebalancing system between collateral sources, triggered by on-chain indicators like average perp funding rates (across @binance , @Bybit_Official , @dYdX , @HyperliquidX ), open interest trends, and the spread between sUSDe yield and T-Bill rates. When indicators signal funding compression, the weighting would automatically rotate to TradFi sources (institutional lending, RWAs, commodity basis). When funding returns to attractive levels, it rotates back. This would eliminate the lag that caused months of underperformance. It is not just about diversifying; it is about having the infrastructure to programmatically rotate between sources, ideally with parameters pre-approved by the risk committee rather than relying on case-by-case approvals.

Ethena is currently proposing a restructuring of USDe's collateral. There will be 4 new backing categories to reduce reliance on crypto perpetual funding rates. This addresses one of the major critiques of the protocol specifically, what would happen when we hit negative funding. Here is a technical analysis of what changesand the remaining open questions 👇