S&P Global launched on October 4 a risk assessment framework for crypto lending vaults, a market that reached approximately $10 billion in deposits in September, up from $1.5 billion two years ago. The same day, an incident on Coinbase-backed Base network resulted in a loss of roughly $6 million through a proxy contract that borrowed and swapped tokens via Aave. This event highlighted the specific risks related to vault permissions, contracts and managers that can generate losses independent of the underlying protocol. S&P’s framework evaluates six areas including portfolio credit quality, liquidity mismatch, curator risk and blockchain risk, but does not constitute a credit rating and does not guarantee capital recovery.
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