Warden Finance Monthly Risk Report

Ideation & Discussion
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Warden Finance Monthly Risk Report (June 2023)

This post aims to share notable updates with the community concerning risk for Moonwell Apollo and Artemis for the month of June 2023 and follow up on some of our previous observations.

Multichain Bridge Situation

  • The Multichain team hasn’t yet communicated any update concerning the recent situation surrounding their team - See this article for more context.
  • Although the bridge is still processing transactions at the moment, the situation still poses significant risk for Apollo users. See Multichain Risk Update by Gauntlet (June 2nd 2023) for more context.
  • MIP-56 aimed to mitigate some of the liquidity risk for USDT.multi and USDC.multi markets (executed on June 18).
  • Utilization has since slightly decreased for both markets, but is still sitting over the kink rate. We may recommend more aggressive interest rate curves for those markets in the forthcoming risk parameter updates. No emergency action is needed at the moment.

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Moonbeam On-chain Liquidity Levels

  • On June 15 2023, we stated that ETH.wh and BTC.wh on-chain liquidity levels were trending to dangerously low levels. We shared our recommendation to potentially update collateral factors and borrow caps for these markets if liquidity levels would not recover.
  • Over the last two weeks, on-chain liquidity levels have been trending up. About 25% of the loss has been recovered for both assets.
  • No immediate action needs to be taken. We will keep monitoring these indicators and provide recommendations if necessary in the forthcoming risk parameters update.
  • Liquidity levels can be tracked on ETH.wh dashboard and BTC.wh dashboard.

BTC.wh On-chain Liquidity (Source)

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ETH.wh On-chain Liquidity (Source)

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Warden Finance Risk & Tooling Engagement Renewal

As stated in Warden Finance Risk & Tooling Grant Proposal (April 2023), the review period of 3 months for our engagement with the DAO will be coming to an end next week.

In the coming week, we will publish a proposal to pursue our engagement with the DAO until April 2024 (3 quarters).

Conclusion

This wraps up our summary for the month of June 2023. Follow us on Twitter for more updates https://twitter.com/warden_finance

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Thanks for sharing these important updates and observations, @WardenFinance.