DeFi-Market-Risk-Report

DeFi Market Risk Report #001

Aave / USDC — Ethereum

Product status: Founding Beta
Methodology: Proof & Signal Evidence-Backed Risk Methodology 0.3.0-beta
Report as of: 2026-10-09T15:51:02.870Z

Executive snapshot

Metric	Result
Supply APY	4.10%
Utilization	94.21%
Available liquidity	$139,656,830
Overall risk	23/100 — MODERATE
Methodology confidence	96%
Market Data Quality	PASS
Report Release Gate	PASS
Commercial Methodology Gate	PASS_BETA

Risk dimensions

Dimension	Score	Band	Confidence	Evidence status
Protocol	8/100	LOW	94%	PASS
Asset	36/100	MODERATE	100%	PASS
Liquidity	52/100	ELEVATED	100%	PASS
Oracle	9/100	LOW	100%	PASS
Stablecoin	18/100	LOW	90%	PASS
Chain	12/100	LOW	90%	PASS

What matters most

The strongest risk signal in this snapshot is liquidity, not protocol or oracle risk. Utilization was 94.21%, slightly above the reserve’s 94.00% optimal utilization point, while immediately available liquidity represented about 5.79% of total supplied value.

The second material area is asset exposure / caps. Supply-cap headroom was about 19.66% and borrow-cap headroom about 15.90%.

The stablecoin dimension remains relatively low on reserve backing and transparency, but the methodology explicitly assigns risk to the issuer administrative control surface because the modeled USDC contract design supports upgrade, pause and blacklist controls.

Highest-scoring risk factors

Dimension	Factor	Score	Evidence-based explanation
Liquidity	Utilization vs optimal	65/100	Utilization is 94.21% versus 94.00% optimal.
Liquidity	Available-liquidity ratio	65/100	Available liquidity is 5.79% of total supplied value.
Stablecoin	Issuer administrative control surface	60/100	Upgrade, pause and blacklist controls are present in the modeled Circle EVM stablecoin design.
Asset	Supply-cap headroom	40/100	Supply-cap headroom is 19.66%.
Asset	Borrow-cap headroom	40/100	Borrow-cap headroom is 15.90%.
Asset	Collateral LTV	25/100	Max LTV is 75.00%.

Verified live market facts

The live Aave MCP reserve-details response identified:

• market: AaveV3Ethereum;
• market address: 0x87870Bca3F3fD6335C3F4ce8392D69350B4fA4E2;
• USDC token: 0xA0b86991c6218b36c1d19D4a2e9Eb0cE3606eB48;
• price source: Chainlink;
• oracle: 0x3f73F03aa83B2A48ed27E964eD0fDb590332095B;
• reserve state: not frozen, not paused;
• max LTV: 75%;
• liquidation threshold: 78%;
• supply cap: approximately $3.0B;
• borrow cap: approximately $2.7B;
• optimal utilization: 94%.

Evidence registry

1. Aave protocol security controls
2. Aave reserve parameters and governance
3. Circle USDC reserve transparency
4. Circle EVM stablecoin administrative controls
5. Ethereum proof-of-stake finality security
6. Ethereum current finality latency
7. Aave MCP tools / reserve details

Methodology disclosure

The v0.3 score is a transparent comparative heuristic. It is not a probability of loss, guarantee, credit rating, suitability assessment, or personalized recommendation.

A PASS_BETA commercial gate means the evidence and methodology completeness requirements passed for a low-cost informational beta report. It does not mean the model has been statistically calibrated to predict future losses.

Product boundary

This report measures and explains observed market risk. It does not instruct a reader to buy, sell, supply, borrow, repay, allocate a portfolio, or otherwise transact.

Decision-support principle: Measure → Explain → Simulate → Let the user choose.