Building the risk standard for digital assets.
On-Chain
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A private-credit vault on Ethereum owes its depositors $179.9M. Its token has one published price a month, and half of it is collateral for $49.6M of loans priced from that mark. What it is, how money gets out, and what would show first.
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Solvent · Ep. 1: FalconX nitter.net/i/broadcasts/1XxygwOeR…
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Solvent is a new livestream format from Xerberus!
One asset per episode, looked at under the microscope.
Episode one: Thursday 17 September, 7:00 PM UK, on X.
In our launch episode we start with the FalconX vault on @paretocredit. Why we chose this KYC-gated vault, which risks to look out for in a vault like this, and what it could mean for the future of DeFi: you'll learn it tomorrow.
@DataHippo_io and @snj_peters look forward to hosting you.
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tail risk nitter.net/i/broadcasts/1vKpPNdWm…
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Livestream tonight, Thursday 10 September,
7:00 PM UK, live on X.
@snj_peters will set out what tail risk means for an on-chain book, how Xerberus measures it, and how the part we do not cover can be an opportunity!
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Some DeFi vaults are finished code. Others are run by a person who can move the money or hold depositors in. We measured 104 vaults against 32 public checks to show which is which, and where yours sits.
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cambridge and compliance nitter.net/i/broadcasts/1wxWjlvEr…
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Going live tonight at 8pm UK, here on X.
@snj_peters will reflect on his time in Cambridge and report what signals global law enforcement is sending to the crypto community.
Tune in, 4 hours to go!
Honoured to have spoken at Jesus College in Cambridge this week.
CIDOEC is the Cambridge International Symposium on Economic Crime. Once a year regulators, prosecutors and law enforcement from around the world meet here to compare notes on what is going wrong.
Crypto was on everybody's mind. Everybody is worried about theft and fraud, and rightly so.
At moments I saw real anger, especially among the older participants. I don't read it as a threat. I read it as the last fight before resignation. The 21st century is the digital age, blockchains are how finance gets done, and a world built on paper is fading with the last generation that grew up in it. There is no reason to be angry at that, or to be angry at them for being angry. It is just what it is.
Change is coming, and ever faster. But it is coming to both sides.
For banks, asset managers, lawyers, judges and law enforcement, change means accepting that public blockchains are not a fad the children do. They are becoming the foundation of the financial system they have to live with.
For us, change means accepting that if you take users' money, hold full control over it and invest it on their behalf, you are doing a regulated activity. It is regulated for good reasons: the moral hazard is enormous, and vaults and stablecoins keep blowing up because of it. The users call the lawyers anyway in the end. Better to accept it up front.
Six weeks ago Commissioner Peirce wrote that vaults fall on a spectrum, from allocations fixed in immutable code to allocations at the sole discretion of a person. My point in Cambridge: that spectrum does indeed exist and it can be measured in the contracts. 105 rated vaults, 32 public safeguard gates each, four quadrants, and the line between them is the manager (the chart behind me).
There is a corridor that can stay unregulated: just code. We should defend it, cherish it and insist on its privileges - anyone may submit a transaction, anyone may deploy a contract. This is our citadel.
But if you are an organisation playing asset manager and merely call yourself decentralised, you should not get the protection reserved for decentralised systems. You aren't the same thing.
Whoever gets this right has the moment of hypergrowth ahead of them. That alone is worth it, as long as the base layer stays decentralised, permissionless and censorship-resistant.
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TL;DR of our CEO @snj_peters Cambridge talk
A vault is run by code or run by a person.
There are four ways to build one, but just one of them is automated.
In the other three someone can move the money, and depositors are trusting that person whether they realise it or not.
We measured this: 105 vaults, 32 public safety checks each.
If code decides, leave it alone. If a person decides, that is asset management, whatever the label says.
Honoured to have spoken at Jesus College in Cambridge this week.
CIDOEC is the Cambridge International Symposium on Economic Crime. Once a year regulators, prosecutors and law enforcement from around the world meet here to compare notes on what is going wrong.
Crypto was on everybody's mind. Everybody is worried about theft and fraud, and rightly so.
At moments I saw real anger, especially among the older participants. I don't read it as a threat. I read it as the last fight before resignation. The 21st century is the digital age, blockchains are how finance gets done, and a world built on paper is fading with the last generation that grew up in it. There is no reason to be angry at that, or to be angry at them for being angry. It is just what it is.
Change is coming, and ever faster. But it is coming to both sides.
For banks, asset managers, lawyers, judges and law enforcement, change means accepting that public blockchains are not a fad the children do. They are becoming the foundation of the financial system they have to live with.
For us, change means accepting that if you take users' money, hold full control over it and invest it on their behalf, you are doing a regulated activity. It is regulated for good reasons: the moral hazard is enormous, and vaults and stablecoins keep blowing up because of it. The users call the lawyers anyway in the end. Better to accept it up front.
Six weeks ago Commissioner Peirce wrote that vaults fall on a spectrum, from allocations fixed in immutable code to allocations at the sole discretion of a person. My point in Cambridge: that spectrum does indeed exist and it can be measured in the contracts. 105 rated vaults, 32 public safeguard gates each, four quadrants, and the line between them is the manager (the chart behind me).
There is a corridor that can stay unregulated: just code. We should defend it, cherish it and insist on its privileges - anyone may submit a transaction, anyone may deploy a contract. This is our citadel.
But if you are an organisation playing asset manager and merely call yourself decentralised, you should not get the protection reserved for decentralised systems. You aren't the same thing.
Whoever gets this right has the moment of hypergrowth ahead of them. That alone is worth it, as long as the base layer stays decentralised, permissionless and censorship-resistant.
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Xerberus retweeted
Honoured to have spoken at Jesus College in Cambridge this week.
CIDOEC is the Cambridge International Symposium on Economic Crime. Once a year regulators, prosecutors and law enforcement from around the world meet here to compare notes on what is going wrong.
Crypto was on everybody's mind. Everybody is worried about theft and fraud, and rightly so.
At moments I saw real anger, especially among the older participants. I don't read it as a threat. I read it as the last fight before resignation. The 21st century is the digital age, blockchains are how finance gets done, and a world built on paper is fading with the last generation that grew up in it. There is no reason to be angry at that, or to be angry at them for being angry. It is just what it is.
Change is coming, and ever faster. But it is coming to both sides.
For banks, asset managers, lawyers, judges and law enforcement, change means accepting that public blockchains are not a fad the children do. They are becoming the foundation of the financial system they have to live with.
For us, change means accepting that if you take users' money, hold full control over it and invest it on their behalf, you are doing a regulated activity. It is regulated for good reasons: the moral hazard is enormous, and vaults and stablecoins keep blowing up because of it. The users call the lawyers anyway in the end. Better to accept it up front.
Six weeks ago Commissioner Peirce wrote that vaults fall on a spectrum, from allocations fixed in immutable code to allocations at the sole discretion of a person. My point in Cambridge: that spectrum does indeed exist and it can be measured in the contracts. 105 rated vaults, 32 public safeguard gates each, four quadrants, and the line between them is the manager (the chart behind me).
There is a corridor that can stay unregulated: just code. We should defend it, cherish it and insist on its privileges - anyone may submit a transaction, anyone may deploy a contract. This is our citadel.
But if you are an organisation playing asset manager and merely call yourself decentralised, you should not get the protection reserved for decentralised systems. You aren't the same thing.
Whoever gets this right has the moment of hypergrowth ahead of them. That alone is worth it, as long as the base layer stays decentralised, permissionless and censorship-resistant.
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bottom of a bear market nitter.net/i/broadcasts/1NxarolDX…
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. @snj_peters going Live in 2h.
Bring your questions & see you there!
🗓8PM UK / 3PM EST
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18 vaults and 6 portfolios , check them out👇
final episode , 6/6 on the hidden shape of DeFi.
Making a thread and a TL;DR of the whole reading experience later.
excited to see what @DataHippo_io gives us a deep dive into next.
We built 3 six-vault DeFi portfolios and priced them on the same snapshot:
1. The most diversified the dependency graph allows:
- 6 protocols, 6 assets, almost nothing shared under them.
2. The one most people actually hold:
- 6 "diversified" USDC vaults across Spark, Euler, Morpho. One asset under all six.
3. The random one:
- median of 400 baskets. One contract under 4 of 6, and nobody chose it.
Real diversification costs about 1 point of yield.
All 18 positions are in the article, so you can study them.
Bookmark for later 👇
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We built 3 six-vault DeFi portfolios and priced them on the same snapshot:
1. The most diversified the dependency graph allows:
- 6 protocols, 6 assets, almost nothing shared under them.
2. The one most people actually hold:
- 6 "diversified" USDC vaults across Spark, Euler, Morpho. One asset under all six.
3. The random one:
- median of 400 baskets. One contract under 4 of 6, and nobody chose it.
Real diversification costs about 1 point of yield.
All 18 positions are in the article, so you can study them.
Bookmark for later 👇
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Xerberus retweeted
I am surprised by the approach @Forgd_ chose.
For example Raydium, a DEX on Solana, is less risky than Solana itself.
Common knowledge would suggest that Raydium is a subset of Solana’s risk, as Raydium inherits all risk factors of Solana.
Now, I am not the biggest fan of Solana, but is it really more risky than Dogecoin? Also, where are ETH and BTC?
We are always open to talk about ideas on how to rebalance this scale and discuss a hierarchical taxonomy that places dApps as a subset of their L1.
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. @snj_peters live.
Always worth your time.
See you there, tomorrow , 3pm EST.
- xerberus
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Xerberus retweeted
I did not design it but low key I love this banner
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