That risk assessment is from March. And also wrong.
Smart contract risk doesn’t transfer if you migrate to a NEW smart contract. It’s a new contract that needs to be tested and that is exactly what needs to be evaluated. This smart contract is <365 days old with 116,912 transfers.
It also doesn’t have 100k holders. According to this $0.24 | Golem Network Token (GLM) Token Tracker | Etherscan it has just 14k holders.
There is very little on chain liquidity and volume. Which is a huge problem. If one of the whale holders decides to park their GLM in AAVE and borrow against it, even with a 10% LTV, it might be favourable to selling on the market if you don’t find someone who buys it OTC.
I made a few tests yesterday via Paraswap. Selling 250.000 GLM yesterday would have had a price impact of 4%. 500.000 GLM moves the price 7.14%. Trying to liquidate a million GLM 13.17%. And that is with the most ideal path, with multiple intermediaries. No liquidator will take on that risk. And these are not really big numbers.
This all needs to be taken into account. That “risk analysis” is just plain wrong.
It also doesn’t help that it feels a bit like a “dead” project. I don’t want to offend anyone really. But they had their ICO in November 2016, made 820k ETH and after 5 years are still in beta? I’m not a developer but that seems slow to me.
All in all, considering a fair risk analysis, I don’t see it as collateral. Maybe as a lending asset, but although there may be growing use cases - there are not really a lot right now.
Maybe it can be listed in v3 with a borrowing cap, I doubt it’ll make it to v2.