Exponential, an funding platform specialised in DeFi rankings, has downgraded the USDA stablecoin’s score from ‘Lowest Threat’ to ‘Low Threat’.
The methodology utilized on this score relies on an evaluation of the dangers related to the DeFi protocol, together with credit score design, collateral high quality and governance dynamics.
This modification primarily stems from considerations in regards to the heavy reliance on the third-party Morpho Blue protocol, the place greater than 50% of USDA collateral is deposited.
Morpho, a comparatively new and fewer confirmed cash market, introduces a possible single level of chapter.
The downgrade additionally follows the same incident with the Euler hack in March 2023, which compromised Angle’s reserves, underscoring the dangers of exterior dependency. Throughout that incident, $17.6 million of Angle’s USDC reserves had been affected on account of the Euler hack.