Risks

Interacting with any DeFi protocol carries risk of loss, and Resupply is no exception. Read this section and the audits before supplying funds.

Peg risk – reUSD is backed by stablecoin denominated lending positions and is kept near $1.00 by a redemption floor (~$1.00 − fee). Prolonged depegs raise borrowing costs (off-peg fee) and can trigger redemptions against your position.
Collateral risk – markets accept volatile collateral (WETH, wstETH, WBTC, …, plus stablecoins). A sharp move down can liquidate positions (5% liquidation fee); liquidations settle through the Insurance Pool.
Insurance Pool tail risk – insurance stakers earn yield for bearing exactly this risk; in a mass-liquidation or bad debt event, pool reUSD is burned and holders absorb the loss beyond pool cover.
Lending-market / integration risk – funds sit in Curve Lend, Curve Lend v2 and Fraxlend positions; a bug, exploit or insolvency in those platforms (or their reward vaults — Convex/Yearn) could impair collateral. sreUSD additionally carries bridge risk (LayerZero OFT).
Governance risk – RSUP governance can adjust fees, limits, and permissions by vote (30% quorum); staked weight concentration means a majority coalition controls the protocol.
Oracle / keeper reliance – interest, liquidations and borrow-limit ramps rely on oracles and the protocol keeper; degraded operation can delay liquidations.

Convex Finance, Curve Finance, Frax Finance, LlamaLend v2, and LayerZero carry their own risks — review their docs and risk frameworks too.

Last updated 1 month ago