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W⬡rmholeOracle@WormholeOracle·6d

The days following the rsETH incident have been long and difficult. Our team has been in round-the-clock war rooms alongside fellow @aave Service Providers Aave Labs, @tokenlogic, @chainlink, and @certora, working toward a resolution. Thanks to the rapid response and coordination between the affected entities, a resolution is in sight that puts users first and protects the integrity of our industry. It’s been a difficult time for many and there is much left to do, but today I’m extremely proud to be here serving with the dedicated team @llamarisk.

The joint effort striving to fully recapitalize @KelpDAO rsETH speaks to the shared accountability of leaders in our industry; to serve the common good first and foremost. We are proud to be working together with @aave labs, @Token_Logic, @chainlink, and @Certora as an Aave Service Provider. The rapid response and tight coordination of Aave SPs in a time of need helped make this possible. In spite of the intense pressure, DeFi comes together to put users first. There’s a long road ahead and it will not be easy, but we stand united. DeFi will win.

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Aave@aave·20 Nis

Update on rsETH incident: @LlamaRisk has published a report outlining the rsETH incident, the immediate actions taken, its impact on Aave, and potential paths forward. All service providers have been working to assess the two potential bad debt scenarios on the Aave protocol. Aave DAO service providers are also leading an effort with ecosystem participants to address any bad debt. This effort already has several indicative commitments from various parties and we are grateful for the strong support we have received so far. We will share further updates as we have them. In the meantime, the full report can be read here: governance.aave.com/t/rseth-incide…

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LlamaRisk@LlamaRisk·13 Nis

@aave V4 should be scaled through tightly governed risk expansion. That means conservative initial caps, bounded credit allocation, and spoke-by-spoke parameterization from day one. This is how a protocol with powerful primitives is launched responsibly. More below ↓

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W⬡rmholeOracle@WormholeOracle·8 Nis

LlamaGuard is solving real bottlenecks to successfully onboard new financial products to DeFi. It represents a paradigm shift in how DeFi protocols consume and act upon real-time risk signals

Our CEO Adam @WormholeOracle at @stable_summit in Cannes on LlamaGuard NAV, risk-informed oracles, @Chainlink’s CRE, and LlamaGuard powering @aave Horizon. Full talk ↓

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LlamaRisk@LlamaRisk·6 Nis

We acknowledge @ChaosLabs' sudden announcement to step down from their @Aave risk mandate. LlamaRisk has served the Aave ecosystem for the past two years, delivering risk frameworks, parametrization, and quantitative models underpinning all Aave deployments across V3, V4, and Horizon. We build protocol-owned risk infrastructure on @Chainlink's CRE and serve as the only independent legal and regulatory research capability within the Protocol. Aave's risk management has never rested on a single point of responsibility. We are fully prepared to fill all operational gaps and will ensure full continuity of risk services. Over the next week, we will present a detailed proposal, including immediate changes to delegated risk systems, to renew our unwavering commitment to the Aave ecosystem. Aave will win!

Stani@StaniKulechov

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.

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LlamaRisk@LlamaRisk·30 Mar

Today our COO @simonb_defi (Val) will be speaking at DeFi Day Cannes panel on Aave V4 and the End of Fragmented Liquidity. If you're around, come find us. 4:05 PM · Palais des Festivals, Cannes

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Stable Summit 🦫@stable_summit·27 Mar

RWAs don’t fail in DeFi because of demand. They fail on risk. Adam Sadowski (@WormholeOracle) from @LlamaRisk explains why oracle design needs a new layer, risk-aware data, not just price feeds. A new stack for safely bringing RWAs onchain:

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LlamaRisk@LlamaRisk·27 Mar

We're in Cannes 🇫🇷 Today, our Founder & CEO Adam Sadowski is speaking at @stable_summit on risk-managed oracles and accelerating RWA adoption in DeFi. 12:25 PM · JW Marriott

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W⬡rmholeOracle@WormholeOracle·22 Mar

@ImperiumPaper If you’ll be at stable summit in Cannes, I’ll be speaking on this topic and you might find it interesting

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PaperImperium@ImperiumPaper·22 Mar

I’ve written plenty on it in the past so won’t spend an essay on it today, but when it comes to stablecoins (including those for ETH or other reference assets), hard-coded oracles are brittle. They work until they catastrophically don’t. In contrast, live oracles allow for real-time risk mitigation, but at the cost of punishing users for false positives if liquidity dries up. Both are a legitimate design choice, but need to follow different underwriting processes. Only hard code if you diligence the underlying asset and are confident in its ability to meet redemptions as designed. Both the technical and financial fundamentals must be solid, and assign a risk premium to rates or haircut to LTV as appropriate. Live oracles let you be relatively agnostic about the quality of the asset (beyond technical safety of the smart contracts) and stay focused on the liquidity availability. Let’s also remember that more complex oracle setups are also possible. I personally have advocated for stablecoins to have a hard code when n liquidity is viable in a redemption contract and then switch to market price oracles the moment liquidity falls below n. Ultimately, this is surfacing again a longstanding “credit migration” problem where DeFi relies on curators and risk consultants to manually flag when an asset goes from excellent to good to fair to poor as collateral. That’s far too slow in cases like USR, even if it was 100% accurate. DeFi automates, speeds up, and simplifies (even if it sometimes seems otherwise) finance compared to traditional alternatives. We’re ultimately building financial vending machines, and it’s just a fact that it’s really hard to make a machine that works as intended under all conditions. But there’s clear ways to improve on both oracle design and oracle use, and it’s disappointing to see slow innovation on that front.

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Stable Summit 🦫@stable_summit·9 Mar

Stablecoins only scale if risk is priced correctly. Adam Sadowski ( @WormholeOracle), Founder and CEO of @LlamaRisk, joins Stable Summit IV to discuss risk-informed data feeds and their role in bringing the next wave of institutional liquidity onchain. JW Marriott · Cannes · 27-28 March

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W⬡rmholeOracle@WormholeOracle·6 Mar

@CurveCap You are one of the formative figures in my Curve journey, much love ❤️

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Left Curve Capital@CurveCap·5 Mar

After 5+ wonderful years, I've stepped down from my official role at Curve. Thanks to everybody on the giga-brained team, your best days are truly ahead. I look forward to continuing to amplify the innovations emerging from Curve and its wider community. I'll share next steps in a future AMA, and will even leak the first answer now: yes, I'm still in crypto.

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LlamaRisk@LlamaRisk·5 Mar

We're seeking renewal as @CurveFinance's risk provider for 2026–2027. Curve is a powerhouse of DeFi innovation, and we are grateful to have the opportunity to serve this community. Partners since 2022 🤝 Here's what's next 👇

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LlamaRisk@LlamaRisk·9 Şub

Recent market conditions have been unusually severe. Sharp BTC and ETH moves triggered rapid deleveraging across DeFi, translating into sustained pressure on @CurveFinance lending markets—particularly mint rates and the $crvUSD peg. These dynamics are not unexpected in the current macro environment. Elevated leverage and external volatility can temporarily increase crvUSD’s sensitivity as YieldBasis scales. While stabilization mechanisms continue to function as intended, timely execution matters during periods of rapid deleveraging. Actions taken: ➣ scrvUSD revenue share is increased to strengthen crvUSD demand ➣ eDAO is authorized to soft-pause YB pools in case of emergency ➣ eDAO is authorized to draw 400K crvUSD from the DAO treasury for peg defense ➣ Mint rates are reduced to limit repayment pressure ➣ Defined escalation paths for additional action, if required All response actions are coordinated with Swiss Stake and Curve stakeholders. Full details on each step below ↓

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LlamaRisk@LlamaRisk·27 Oca

LlamaRisk │ @ethena since 2024. 🤝 Our collaboration with Ethena goes back to 2024, when we launched the Ethena Risk Monitoring Dashboard with a transparent view into the protocol’s risk posture and reserve adequacy. The Reserve Fund sits on top of Ethena’s core risk management and serves as an additional protection layer. It helps keep USDe overcollateralized during drawdowns that may arise from perpetual futures exposure, negative funding rates, or unexpected operational losses. The size of the Reserve Fund is not arbitrary. LlamaRisk and @blockworks, as part of Ethena’s Risk Committee, continuously analyze market conditions and simulate stress scenarios under which the Reserve Fund could be invoked. Specifically for this reason LlamaRisk has developed the Reserve Fund drawdown methodology, continuously quantifying the capital adequacy and recommending the capitalization levels that protect Ethena from tail-risk drawdown scenarios.

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LlamaRisk@LlamaRisk·22 Oca

@CurveFinance’s crvUSD rate volatility isn’t a peg problem. It’s a rate dynamics problem. Despite heavy flow through yield venues, the peg has held strong. The real issue is volatile rates driven by fast PegKeeper debt shifts, not price deviation. We’ve analyzed the root cause of this volatility and explored whether rates can be smoothed without weakening borrower-driven peg defence. Using onchain data and backtests, we examined how borrowers actually respond to different rate regimes and tested a proposal to smooth PegKeeper debt contribution using an EMA. The goal: reduce unnecessary rate swings while ensuring rates still reach levels where borrowers historically act during stress. The result is a pragmatic configuration that meaningfully improves rate stability without dulling the system’s core feedback loop. Details, data, and recommendation below 👇

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LlamaRisk@LlamaRisk·15 Oca

@CurveFinance's crvUSD is a core building block of the Curve ecosystem, widely used across mint markets and AMMs. With the introduction of @yieldbasis, it has dominated crvUSD flows and generated substantial volumes, while testing its peg durability. crvUSD plays a central role in Curve’s monetary system, and its design assumptions are being tested as new primitives scale. We analyze how YieldBasis changes crvUSD supply dynamics, and what this means for peg stability and risk as credit limits grow.

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Jordi in Cryptoland@lordjorx·14 Oca

The engine behind Curve’s evolution. @LlamaRisk has been a key contributor to Aave, but their main focus remains @CurveFinance. In just six months, they shipped 26 proposals, literally one per week. This activity is insane. I’d highlight two major areas of impact: 1/ Scaling crvUSD with @yieldbasis The launch of YieldBasis this year completely changed the game. Suddenly, the demand and utility for crvUSD skyrocketed But does the massive revenue from Yield Basis justify the risk to crvUSD? Yes, but it requires constant control. We’ll dive deeper into this on my channel soon. 2/ @llamalend V2: Extreme Stress & Integrations They are currently battle-testing LlamaLend V2 using tools that simulate "extreme stress" scenarios. However, what really gets me excited for 2026 is the integration potential: > Pendle PT Tokens: Following their success on @aave, bringing PT tokens as collateral to the protocol would be a massive play. > Curve LP Positions: Imagine using your LP positions as collateral to borrow cheap debt, then looping that back into bribe-heavy pools. Just a dream come true. Imagine a sub-market where @ConvexFinance boost your yield and then uses that position to let you borrow from them as a third party. Insane. Curve is moving fast and manual voting for every technical parameter is becoming a bottleneck. That's why LlamaRisk has proposed a Delegation Proxy. So if you hold veCRV, I'd delegate your technical votes to them. I’m a fan of decentralization, but for complex parameter updates, I’d rather have the smartest people making fast, efficient moves than watching the protocol fall.

Working with @CurveFinance since 2021. Here’s our latest update on our progress. 🦙 We focused on proactive risk management, $crvUSD stability, oracle upgrades, governance, YieldBasis research & market optimization, strengthening Curve’s resilience, and LlamaLend v2 prep. Here are some key highlights from the report: • Secured a 250,000 OP grant from @Optimism to bootstrap LlamaLend v2 • Protocol revenue continued to grow steadily • LlamaLend v2 prep & coordination with Swiss Stake on audits, launch sequencing, and specs • Developed new risk frameworks for upcoming markets • Contributed to improved crvUSD stability • Contributed towards designing more robust oracles for Llamalend markets • Submitted 26 governance proposals across LlamaLend, crvUSD, and AMMs with great engagement

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Curve Finance@CurveFinance·13 Oca

Very nice assessment of @falconfinance and good job by @LlamaRisk continuously studying multiple stablecoin assets in depth!

We’ve analyzed @falconfinance USDf. 🦅 Our risk assessment examines performance, on-chain management, and compliance. Key insights cover liquidity, volatility, smart contract security, and regulatory factors. Read the full report below ↓ Falcon’s USDf is incubated by @DWFLabs, with $2.1B in circulation, ranking it among Ethereum’s top 10 stablecoins. Falcon positions USDf as an overcollateralized “synthetic dollar,” minted against stablecoins and non-stablecoin assets. The protocol manages deposited collateral through diversified, market-neutral and arbitrage-based strategies, while enforcing risk-based overcollateralization depending on asset type. Collateral is secured via third-party custodians working on an off-exchange-settlement (“OES”) model. On-chain protocol operations are managed by multi-sig, which includes an on-chain Insurance Fund. Transparency is provided via weekly reserve recalculations and attestation reporting, supplemented by quarterly independent ISAE 3000 assurance from a reputable third-party firm, with disclosures published on Falcon’s public transparency dashboard. Our assessment employs quantitative and qualitative methods, providing insights for teams considering onboarding USDf into DeFi protocols and for capital allocators to understand the asset risk profile. It evaluates USDf across performance, reserves management, on-chain architecture, and regulatory/compliance factors, providing insights into risk and opportunities for safer DeFi integration.

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Falcon Finance 🦅🟠@falconfinance·13 Oca

When top researchers look under the hood, the details matter. A solid deep dive into Falcon’s protocol design, collateral frameworks, and risk management.