Waterfall Status Update #6
Introduction
Good day, Waterfall Gang!
Despite the recent market turbulences, the team at Waterfall has been putting our heads down to continue building as we are pushing out new integrations and products. Let’s dive straight into the content!
Stargate Integration
Waterfall’s newest integration with Stargate Finance on the BNB chain was launched 2 weeks ago. We’ve packaged Stargate’s BUSD pool into our BUSD Falls product which also consists of BUSD lending pool from Alpaca Finance and Venus Protocol. Stargate is pioneering liquidity unification via the protocol’s cross-chain capabilities. We believe in a multichain ecosystem reducing the hassle of bridging while increasing capital efficiency has made Stargate a platform with huge potential. Integrating into Waterfall DeFi’s ecosystem is a no-brainer for us.
Meanwhile, the AVAX version of the Stargate product with USDC as the base currency was just launched as well. We are working on continuous integration with new and interesting yield farming protocols to ensure our users can expand their range of product selections. More importantly, adding additional integrations within our tranching products greatly improves diversification as it can reduce concentration risk in the case of a protocol “rug”. As you are aware, last week the whole crypto market felt the shockwave of the depegging of UST on Terra Blockchain.
Market Volatility
As we are still living in the aftermath of the fall of LUNA and its algo stablecoin UST, one ripple effect of the depeg was it allowed attackers to take advantage of UST’s collateral miscalculations to exploit lending protocols. Unfortunately one of the affected parties was a protocol that was integrated within Waterfall — Venus Protocol, which you can find the details here.
Venus is a long-term partner of Waterfall DeFi, and has been since day 1 of our project. As a result, one of our active products — the BUSD Falls — was also affected because of this. While Venus had frozen the protocol for security measures, the Waterfall team also activated the emergency process to stop the cycle early and actively monitored the development at Venus — to ensure we are getting our users’ funds out as soon as possible.
We finally managed to stop the cycle and retrieve the funds shortly after Venus reopened the protocol, and we saw a sharp drop in the yield return, all three tranches’ capital was preserved. Senior and Mezzanine tranches still received the fixed rate that was prescribed before the cycle started, Junior tranche only had a reduction in yield return and its capital was fully intact at maturity.
The downfall of LUNA and its aftermath will continue to reverberate in the days to come. While there will be many of uncertainties and despair in the community right now, we must move forward and keep building. Waterfall DeFi strives to build and design products that offer proper risk-reward for our users, as our Senior / Mezzanine products with fixed returns are a perfect low-risk shelter for those who want to stay away from the market volatility.
