Assurance and Risk
Last updated
Last updated
Admins cannot arbitrarily mint VBUSD
wstETH-ETH swaps are limited to a certain slippage
Multi-step redemption prevents reentrancy attacks
Multiple in place to ensure full collateralization
Reserves can be rescued from the contract in case of a bug
The project is fully decentralized (no centralized exchange involvement)
Project-specific Hardhat Solidity testing scripts have been created and used
Many applied tests of the contracts have also been done and passed
The consists of very ethical and all-around cool people
GMX Insolvency: If GMX traders win overall, or if the GMX protocol is exploited, their asset vault could be drained, and we could be unable to redeem our short position for full value
Slippage: The protocol is required to complete swaps during certain operations, which may result in slippage if the liquidity is insufficient. However, we only swap on major pairs such as WETH-wstETH, on the DEXs with the deepest liquidity.
Changes in leveraged trading market participation: Funding fees could turn negative, and we could be charged maintenance fees on our short. This would be a , as longs have traditionally been more popular than shorts
Extreme volatility: Excessive fluctuations in ETH price could result in repeated GMX position opening fees from , especially if the delay between short position closing and opening is longer than anticipated. However, it seems unlikely for significant losses to occur via this route, as we do not expect reinitialization to occur often, and it will only occur when ETH moves in the upward price direction.
Extreme network congestion: Gas fees could rise exponentially, resulting in fees that make it impractical to
VBUSD Technological risk: some aspect of the all-new DeFi primitive's code could be faulty
GMX technological risk: some aspect of the all-new GMX Synthetics code could be faulty
Team risk: The protocol could be halted if the team loses one or more key members. An orderly wind down would be conducted in that case.