LlamaRisk - Monthly Community Update
June 2025
Overview
LlamaRisk presents our June 2025 monthly update, summarizing key activities and outlining upcoming priorities.
Highlights
Recommendations and inputs
Asset onboarding
- [ARFC] Add XAUt to Aave v3 Core Instance - Supported onboarding while flagging lack of bug bounty, no timelock on upgrades, and concentrated DEX liquidity; also shared follow-up analysis on XAUt’s pricing peculiarities to inform the DAO.
- [TEMP CHECK] Onboard USD1 to Aave V3 Core and BNB Instance - Appreciated the initiative and informed the DAO about ongoing outreach to the USD1/BitGo team to obtain necessary information.
- [Direct to AIP] Onboard sUSDe September expiry PT tokens on Aave V3 Core Instance - Supported onboarding given the relatively long maturity horizon, which justifies integration effort.
- [Direct to AIP] Onboard wBTC to Sonic V3 Instance - Recommended onboarding while noting limited wBTC supply on the Sonic network.
- [ARFC] Onboard tBTC to Aave v3 on Base - Supported onboarding with a focus on using the BTC/USD feed for pricing and recommended a trigger switch mechanism with a PoR feed for user protection.
- [ARFC] Onboard wstLINK to Aave V3 Core Instance - Supported onboarding while highlighting slashing penalties on LINK as the primary risk to Aave users.
New chain
- [ARFC] Deploy a Whitelabel Aave V3 Instance on Ink - Recommended the deployment, conditional on a technical review by @BGDLabs.
GHO related
- [ARFC] GHO CEX Earn Incentive Program - Supported the program while outlining associated risks of CEX integrations.
E-modes
- [ARFC] Addition of USDe to Ethena Principal Token Stablecoin E-Modes - Supported the proposal to include PT underlying assets as borrow-only within existing stablecoin E-modes.
- [Direct to AIP] Onboard rsETH to Aave V3 Linea Instance - Recommended onboarding with capped supply and correlated E-mode, while highlighting liquidity, bridge, and pricing risks.
Legal Commentary
- [TEMP CHECK] Adopt The SEAL Safe Harbor Agreement - Provided risk-adjusted measures for adoption of SEAL conditions by the DAO.
- [TEMP CHECK] Add XAUt to Aave V3 Core Instance - Provided regulatory clarification confirming TG Commodities as a licensed issuer and requested greater transparency on XAUt operations to strengthen our due diligence.
- [ARFC] Aave and ether.fi Cash: A Proposal for Real-World Utility - Consolidated and presented legal assessment of Cash’s contractual architecture and associated implications.
Misc.
- [Direct-to-AIP] Aave v2 non-Ethereum pools next deprecation steps - Supported the proposal in line with prior V2 deprecation efforts.
- [Direct-to-AIP] Aave <> Chainlink SVR v1 activation. Phase 3 - Supported the Phase 3 rollout with an overview of SVR’s performance, financial impact, technical functionality, and associated risks.
Research and analysis
- LlamaRisk Insights: Aave’s PT Token Exposure & Risk Outlook - Assessed risks from Aave’s growing Pendle PT token exposure, highlighting concerns around concentrated PT liquidity within Pendle AMMs.
- LayerZero OFT Standard: DeFi Exposure & Risk - Outlined the architecture and risks of the OFT token standard, which underpins $7.4B in Aave deposits, covering smart contract vulnerabilities, price feed dependencies, and legal uncertainties.
Community Engagement
- Newsletter: This Week in Aave - Continued delivering weekly roundups of Aave governance updates while enhancing content with a fresh look and deeper insights for stakeholders and users.
Upcoming Focus Areas
- LlamaRisk’s Aave SVR Dashboard - Updating the dashboard to monitor and analyze the performance of newly included assets under Phase 3 to Chainlink’s SVR mechanism within Aave on various financial and technical metrics.
- LlamaRisk Risk Metrics Dashboard - Advancing to Phase 2, which expands coverage with deeper assessments of currently listed assets (live on Aave) across additional risk dimensions, while onboarding new assets.
We welcome community feedback and suggestions. Please share any questions, ideas, or areas where you would like increased focus from the LlamaRisk team.