Risk

What can go wrong

Risk cannot be removed — it can be named, limited and shown. Below are the main risks, most important first. We do not give risk scores: there is no honest number for that.

The main risks

A lending protocol fails or is hacked

Money sits in smart contracts run by other teams. A bug or exploit there can lose part of it — no insurer stands behind it.

ConservativeBalancedAggressive

More detail

Only protocols above a minimum market size are used, and no single protocol may hold more than a set share of the portfolio. That limits the damage of one failure; it does not remove it.

A stablecoin loses its dollar peg

A "stable" coin can trade below $1 for days or for good. Yield does not help if the coin itself loses value.

ConservativeBalancedAggressive

More detail

The portfolios hold USD stablecoins only. A depeg has not occurred during this track, so the measured drawdown does not show this risk.

Leverage and liquidation

Borrowing to buy more multiplies both gains and losses. If collateral falls far enough, the position is liquidated.

Aggressive

More detail

Only Aggressive uses leverage, and only as a simulated loop. Conservative and Balanced use none. Aggressive is refused for real capital.

You cannot exit when you want

A lending market can be fully borrowed, a fixed-rate position may need to be sold below its value, a loop may be slow to unwind.

ConservativeBalancedAggressive

More detail

Conservative stays in daily-liquid lending markets; Balanced holds a fixed-rate leg to maturity; Aggressive depends on market depth.

Short history

A few months of paper results say little about a bad year — and some strategies have only days (see each strategy's day count).

ConservativeBalancedAggressive

More detail

Rates are published only after a minimum number of evidenced days, and every figure carries its measurement date.

Real trading costs more than paper

These are simulations. Real gas, slippage and delays would lower the results shown.

ConservativeBalancedAggressive

More detail

Modelled gas and slippage of the portfolio's own moves are charged; real execution costs are not.

Too much in one place

Holding few protocols on few chains means one problem hits a large share of the money.

ConservativeBalancedAggressive

More detail

Per-protocol and per-chain caps apply to Conservative; the research portfolios hold only a handful of positions.

Yields fall

Lending rates move with demand. When borrowing demand drops, income drops with it.

ConservativeBalancedAggressive

More detail

Past rates are measured, not promised; the research target is not a forecast.

How each portfolio is limited

Conservative

risk: lower

−5% from peak → no new positions (hold and reduce only); −10% → all to cash

Lending markets — normally withdrawable daily; can be delayed if a market is fully borrowed.

Balanced

risk: medium

−8% from the current version’s peak → the portfolio stops trading; positions are kept (a stop trigger, not a maximum-loss guarantee)

The fixed-rate part is held to maturity; exiting early means selling at the market price.

Aggressive

risk: higher

−25% from the current version’s peak → the loop is unwound and the portfolio stops trading; before that the loop deleverages and unwinds on its own health-factor and USDe-price triggers (a stop trigger, not a maximum-loss guarantee)

Unwinding a loop depends on market depth; in stress it can be slow and costly.

Paper stage. Live capital is not open; opening it requires a decision by the project owner and a legal review — not just a day count.

Go deeper

Past crises replayed Full risk disclosure Disclaimer

Not an offer or investment advice. Returns are variable and not guaranteed; loss of funds is possible.