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Risks
The main risks that the vault is exposed to as well as their mitigants are as follows:
  • Smart Contract Risk: Funds in the vault are exposed to BRAHMA's smart contract risk as well as the smart contract risk of the underlying protocols that funds are deployed in.
    • Consensys Diligence and Zellic have performed audits on Brahma's smart contract architecture, more here.
    • The vault only deploys funds to blue-chip, battle-tested protocols.
  • Stablecoin Peg Risk: The vault deploys USDC to various stablecoin liquidity pools and thus takes on peg risk of all the underlying stablecoins. If one of the stablecoins in a pool loses its peg, then the pool may hold most of its assets in the depegged asset, resulting in capital losses for the vault.
    • Stablecoin pools are evaluated using BRAHMA's Stablecoin Risk Framework before allocating vault capital.
    • The health of the stablecoin pool is continuously monitored using predefined quantitative metrics. Actionable alerts provide early warning signals to prevent capital losses.
    • The vault proactively rebalances pool allocation according to risk.
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