Collateralization under stress
Venus Protocol's assessment for RD-F-068 — scored yellow on the v1.7.0 rubric. The evidence below is the curator's reasoning for this score.
Evidence summary #
Venus enforces liquidation via Comptroller with 50% close factor (standard) and forced liquidation at 100% when flagged. The Core Pool uses shared liquidity; a single large market disruption propagates across the pool (evidenced in 2021). Protocol has since added supply caps, borrow caps, collateral factor reductions, and Risk Stewards for dynamic parameter adjustment. The Risk Fund for Isolated Pools is funded at ~50% of pool income. However, the Core Pool lacks automatic bad debt tracking at the moment (per Risk Fund docs), relying on treasury funding for shortfall resolution. Curator simulation not performed (PH curation required). Historical record shows the protocol has breached 100% collateralization under stress (2021 XVS: >$100M bad debt created). Not confirmed to be currently below 110% under standard parameters; flagged yellow given history.
Sources #
- URL200M Venus Protocol Hack Analysis — QuillAuditsQuillAudits — 2021 XVS collateralization below 100% ($100M+ bad debt)retrieved 2026-04-28
- Liquidations — Venus ProtocolVenus docs — Liquidation guide (close factor, forced liquidation mechanics)retrieved 2026-04-28
- Risk Fund and Shortfall Handling — Venus ProtocolVenus docs — Risk Fund and Shortfall Handling (Core Pool lacks automatic bad debt tracking)retrieved 2026-04-28
Methodology #
Determine whether under curator-defined stress scenario (top-3 collateral assets drop 50%), protocol net collateralization falls below 110%.
See the full factor methodology and distribution across all protocols →