Sky misconfigured the replacement pool as well apparently. The comment below is part of a proposal to fix the second pool.
As noted elsewhere, the Sky Frontier Foundation appears to be one of the largest borrowers and just sitting in sUSDS (so a very large negative carry trade with 38% borrow rate)
That’s $16m of liquidity right there that could be returned to help unblock this market and you have to wonder why a Foundation is paying so much money while contributing to the logjam.
Execution risk is real, even for experienced teams.
In an effort to provide exit options to embattled stUSDS depositors, Sky set up a Curve pool and added 500k of USDS rewards. Unfortunately the pool is misconfigured, so a new pool with another 500k USDS rewards had to be spun up.
$500k mistake. As a reminder, stUSDS is a yield bearing deposit backed only by SKY tokens, where utilization has remained persistently at 100% despite 35% APY.
There is also a proposal on the Curve forum to change the pool fee from 1 basis point to 100 bps, since the pool is specifically intended to support liquidity for a distressed asset.
Depositors have consistently fled stUSDS since the initial 40% rate was ratched down sub-5%. Despite bone-crunching rate hikes to attract deposits back to the market, depositors have not outpaced withdrawals as stUSDS holders have fled.
Notably, the largest borrower also controls Sky governance and has announced that the liquidation threshold will drop from 145% LTV to 120% LTV, in a move that can’t be helpful to slowing depositor flight.
0 out of 5 stars. Do not recommend. Avoid stUSDS.
1.37K
4
The content on this page is provided by third parties. Unless otherwise stated, OKX is not the author of the cited article(s) and does not claim any copyright in the materials. The content is provided for informational purposes only and does not represent the views of OKX. It is not intended to be an endorsement of any kind and should not be considered investment advice or a solicitation to buy or sell digital assets. To the extent generative AI is utilized to provide summaries or other information, such AI generated content may be inaccurate or inconsistent. Please read the linked article for more details and information. OKX is not responsible for content hosted on third party sites. Digital asset holdings, including stablecoins and NFTs, involve a high degree of risk and can fluctuate greatly. You should carefully consider whether trading or holding digital assets is suitable for you in light of your financial condition.