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1/ Introducing the Crypto Banking System, a roadmap to bring DeFi to be a challenger to TradFi
cryptobanking.network/the-crypto-ban…
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SebVentures
5.3K posts
SebVentures
@SebVentures
interest rate scholar Founding Chef at @SteakhouseFi Too boring for #DeFi, too punk for #TradFi
Katılım Haziran 2009
977 Takip Edilen12.5K Takipçiler
SebVentures retweetledi
At our European Policy Reception during @ParisBlockWeek, we caught up with our good friends over at @SteakhouseFi!
Co-Founder, @SebVentures, gave Adriana Ennab a rundown on exactly why they partnered with us!
Watch till the end to find out his views on fighting for your 4%👀
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On the EURCV, the "spike" is due to the migration to V2 and the launch at the same time of new markets.
As a lender, you shouldn't be on the V1, the V2 has incentives and is more future proof. You can use our app for migration app.steakhouse.financial/earn?chains=Ma…
As a borrower, the market remain the same. We launched new ones that are a bit safer, but no plan yet to force any migration. The goal for EURCV for now is to find more borrowers. Rates will harmonize and get smoother over the next weeks.
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Thanks for the clarification and the forum link, Seb. The V2 to direct Markets V1 Adapter migration explains the rate volatility on the old routed markets but the temporary liquidity drops and IRR spikes during reallocation were confusing.
It would have been helpful to have clearer heads up on timing, expected impact and chain of actions but am glad for your reply.
Am wondering...
Are the underlying borrow markets staying the same long-term, or will everything consolidate cleanly under V2?
Should I move from v1 there and is there a simple migration action or I have to unwind manually step by step.
Appreciate the direction to keep the structures efficient overall.
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Decrease of liquidity in the markets is due to the lack of public allocator for Vault V2.
If someone has a huge borrow need, they can reach out to @SteakhouseFi . The markets are reallocated frequently.
There was never 100M EURCV on Morpho I think, just double counting which is now gone.
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Hey Tomas, we covered the migration of V2 vault allocations to V1 markets in our Morpho Forum post earlier this month: forum.morpho.org/t/steakhouse-v…
This migration follows Morpho's frontend changes, which will only display pure V2 vaults going forward. As we noted last week on X (x.com/SteakhouseFi/s…), we have been moving our V2 allocations directly into V1 markets.
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@yeak__ Morpho is best to borrow and post collateral as there is no rehypo and no freeze.
And it is cheaper cf your chart.
I do think for lenders it is best as well, but can be more debated. For borrowers, hard to make any case.
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SebVentures retweetledi
Steakhouse V2 vaults have begun to allocate directly to @morpho V1 markets.
V1 depositors remain unaffected through the transition, but there will be a decrease in V1 deposits, since V2 vaults won't be routing through these. Liquidity remains unchanged and aggregated at the market level.
We recommend all V1 users move their positions to V2. This is where Morpho incentives accrue, and where the ongoing developments will focus.
For V1 vault users, migrating to V2 is straightforward: visit app.steakhouse.financial, connect your wallet, and follow the migration path from the Portfolio page.
Steakhouse Financial@SteakhouseFi
As part of a requested migration by Morpho, Steakhouse V2 vaults will progressively transition from allocating to Morpho Vault V1s to allocating directly to the Markets V1 Adapter in order to remain visible in the Morpho UI. At present, most V2 vaults allocate to a V1 vault, which then allocates to V1 markets on Morpho Blue. This update removes that intermediate layer and simplifies the overall structure. This is an operational and structural change only. It does not affect the underlying market exposures of the vaults, and it has no impact on users of the V1 vaults themselves. Over the coming weeks, Steakhouse will perform a significant number of curation operations to implement this migration across its V2 vaults.
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SebVentures retweetledi
I appreciate the call-out to @SteakhouseFi in the report. It was nonetheless very stressful. It continues to be a knife-edge until the teams involved, at their earliest convenience, find a reasonable resolution to unfreeze liquidity.
There is no victory lap or dunking possible about net flows to different places. We are not interested in shuffling musical chairs around. The overall movement of liquidity (>$10bn in net outflows from the system as a whole) is a verdict on the presumed cost of capital for operating in all onchain money markets.
Our response from @SteakhouseFi is definitive. We are already known to issuers for being a huge pain in the butt and we are proud of it. In the good cases, this attitude is appreciated by teams and feedback is taken onboard. People should expect this to escalate.
We will be ratcheting up the hurdle on issuers to demonstrate seriousness from a credit and market perspective but in particular from a security point of view. This includes the expectation of working with trusted third-party subject matter experts to review and monitor security practices.
We continue to advocate that Prime repo is priced reasonably efficiently - and indeed rates on Steakhouse Prime vaults played that out over the past few weeks. However, High Yield markets have an operational risk factor that is clearly not adequately captured by the market at the moment.
Our goal is to leverage our outsize position in the curation market to drive this change in a positive direction. So far, it has been encouraging to see a reciprocation in the response from issuers we have floated this to.
I am positive we can demonstrate that onchain capital markets can operate at greater speed, more transparency and significantly lower risk over time.
Carlos@0xcarlosg
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@gordonliao @MonetSupply I doubt most people would go lend even at 50% until the risk is clearly removed.
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@MonetSupply Intuitively, if you remove a price ceiling in a market, usually the market expands instead of shrinks. Yes, some borrowers will stop borrowing, but others that currently can't borrow due to limited supply but willing to pay more should be able to expand the market.
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@MonetSupply nailed this on April 19 — especially “raise slope2 params asap.”
Three days later we’re still sitting at ~100% utilization on USDC (and other stables) with basically zero available liquidity. Let's change that and unstuck the market
monetsupply.eth@MonetSupply
to give some unsolicited feedback - raise slope2 params asap - set ltv0 for any markets that are nearing illiquidity (100% utilization) - seriously consider freezing borrows across all assets for markets with material rsETH exposure and/or illiquid markets - seed aWETH/ETH pools at 2-4% range discount on uniswap to allow users to liquidate unsafe positions within the liq penalty
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SebVentures retweetledi
Best explanation of Kelp incident by @bgilliam1982 (assuming you like financial history)
mail.blockworks.com/p/1925-bank-ru…
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@gordonliao They can change it anytime. It's a tradeoff cs Morpho in with the curve move with time and no one can change it.
They can't liquidate ETH collatéral right now. So screwing the lenders is also a way to protect them.
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Happy to dig into specific curves or parameter spaces with anyone working on this in the onchain borrow/lend space. The market clearing issue is solved at the mech design and microstructure level.
14/14
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Aave's stablecoin lending pools are at 100% utilization for ~3 days. Billions withdrawn. LPs can't exit. Borrow won't budge.
This isn't the rsETH hack spreading. It's a governance-set rate ceiling like price control, a market failure coded in Solidity. 🧵
1/
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SebVentures retweetledi
Steakhouse runs 100+ Aragon DAOs, one per vault, with optimistic governance.
Any depositor with $1 can veto a curator decision during the timelock window. @SebVentures explains how depositor governance works at scale without blocking operational efficiency.
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@MateuszAtCC @SteakhouseFi It was probably a mistake or wstETH price arbitrage, they are getting out, so liquidity is back (not yet reflected in the UI for the V2 so I'm posting V1)
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@MateuszAtCC @SteakhouseFi Which I understand is annoying when you want to redeem and there is so much competition.
But it is not illiquid because nothing is going on.
I don't get why this IPOR vault is getting into losing money, maybe saving themselves from Aave
app.ipor.io/fusion/ethereu…
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Deposits on Smokehouse USDC on Ethereum, and Steakhouse High Yield USDC and USDT on Arbitrum have been fully re-enabled. Withdrawals continue to function, as before.
We will continue monitoring the situation for any potential contagion effects and communicate where relevant.
Steakhouse Financial@SteakhouseFi
We will begin progressively re-enabling deposits across these Steakhouse vaults. This was a preventative emergency fallback policy taken to safeguard against edge-case attack vectors that we instated following prior exploit events. The safety of our users remains our utmost priority. We will continue to monitor the situation and provide regular updates.
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@MateuszAtCC @SteakhouseFi That's another one, i reckon liquidity is thin, but it fluctuates. Someone withdrew 300 ETH 2 hours ago.
We have no reason to doubt about the solvency of the vault which is quite vanilla.
Original message is about us gating withdrawals, which we can't.
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@MateuszAtCC @SteakhouseFi Monad Steakhouse Prime ETH is at 100% utilization but isn't named Instant. I assume it is the one you mention.
The vault is fine as the only collateral is wstETH. Rates will increase until borrowers repay which should happen within a few days at max (or get liquidated).
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@SteakhouseFi What about SteakhousePrime Instant ? Its liquidity is currently at 0.
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Spark Savings spUSDT is the ONLY liquid defi deposit for USDT
Aave Core: illiquid for past 2 days (and potential bad debt for rsETH hack)
Morpho: currently all major vaults/markets are at 100% utilization
@sparkdotfi Savings: >$400 million in instantly available liquidity
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@Chirkov_BTC @Morpho I'm not sure Aave rate are back to normal.
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@SebVentures @Morpho Thanks! Hope will change soon to normal rate as on Aave already back to normal.
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Yesterday, shortly after the recent events involving Kelp DAO and the LayerZero Bridge, the Morpho Association paused the OFT bridge for the MORPHO token on Arbitrum as a precautionary measure. Arbitrum bridging will remain paused until the root cause of the rsETH incident is identified.
LayerZero@LayerZero_Core
We’re fully aware of the rsETH exploit and have been in active remediation with the @KelpDAO team since the incident and continue to monitor. All other applications remain safe. We are still identifying the root cause alongside @_SEAL_Org and others. We will publish a complete post-mortem with @KelpDAO as soon as we have all information.
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@MonetSupply @felix_fan @TrustWallet Was it low risk when resolv created issues across isolated pools too?
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Shocked to see liquidity extraction from AAVE. This is one of the reasons we have indefinitely deprioritized @TrustWallet sophisticated Earn products & back to basics.
On-chain earning for normies is definitely a no-go: low APY, total loss at any time.
We’d continue servicing: Native staking; promotional rewards with no smart contract risks.
Aave@aave
The rsETH markets on Aave V3 and Aave V4 have been frozen. Aave's contracts have not been exploited and this is an exploit related to rsETH. The freeze follows an exploit of the Kelp DAO rsETH bridge. Freezing the rsETH markets prevents new deposits and borrowing against rsETH collateral while the situation is assessed. We are reviewing information about rsETH borrows on Aave that occurred after the exploit and will share more details as soon as possible. If the protocol accumulates bad debt from this incident, we'll explore paths to offset the deficit.
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