Please see below to view Gauntlet’s recommendations to support the Venus community in combatting the concerns of added risk due to the USDC Depeg. Gauntlet has recommended pausing Aave markets and pausing borrowing for Compound markets based on the de-pegging of USDC. However, the protocol-specific dynamics of Venus are different on several vectors. At this moment, we do not recommend pausing the Venus market since our analysis indicates relatively low insolvency risk given USDC collateral factors and usage. If the USDC price falls below $0.87, we recommend pausing the market.
- If USDC’s price falls below $0.87, Gauntlet is recommending that Venus should pause USDC new borrowing and supplying, and prevent liquidations of accounts supplying USDC in order to prevent significant insolvent liquidations.
- Estimated total liquidations since USDC’s depeg: ~$800k. We observe and estimate that these liquidations did not result from the recent depegging of USDC, but rather from price declines in BTC and LTC.
- No significant new insolvencies have been observed since USDC’s depeg.
Next Steps:
- We will continue monitoring USDC and Venus markets and provide updates or recommendations as needed.
DISCLAIMER: Gauntlet does not manage or quantify depeg risk as we do not have visibility into USDC centralization risks. Instead, we are providing context in response to a potentially impactful exogenous event.