Is Granite Safe?
Risk Grade: B- (30/100)
Granite is rated as moderate risk — some novel mechanisms, generally well-understood.
Moderate risk — well-designed Bitcoin lending protocol with strong security practices and novel soft liquidation, but sBTC bridge dependency and Stacks throughput constraints are meaningful risk factors.
Granite is a Bitcoin-native lending protocol on Stacks that lets you borrow stablecoins against your Bitcoin (sBTC) without giving up custody. It uses a soft liquidation model that only partially liquidates positions to restore solvency, reducing the impact on borrowers. The protocol has completed multiple audits, runs a bug bounty program, and integrates Pyth oracles for price feeds.
TVL
$16M
Mechanisms
6
Interactions
5
Value Grade
D+
Key Risks for Granite Users
Your collateral is in sBTC, which depends on a threshold signature bridge between Bitcoin and Stacks — if this bridge is compromised, your sBTC collateral could lose its BTC peg
Stacks has slower block times than Ethereum, which means liquidations may execute with delay during rapid Bitcoin price drops, potentially creating bad debt that affects stablecoin depositors
The protocol is relatively new in the Bitcoin DeFi space with limited historical stress-testing during major market downturns
Top Risk Factors
- •Granite depends on sBTC — a non-custodial Bitcoin-backed asset on Stacks secured by Stacks validators via threshold signatures; sBTC bridge security is a critical dependency
- •Pyth oracle integration for Bitcoin price feeds on Stacks introduces oracle dependency; any price feed staleness or manipulation could trigger incorrect liquidations
- •Stacks blockchain has lower throughput and longer block times than EVM chains, which could delay liquidation execution during rapid price declines
How Granite Compares to Peers
Granite ranks #19 of 90 Lending protocols (top quartile — safer than most). At a risk score of 30/100, it's 7 points safer than the sector average of 37/100.
Adjacent peers: Silo Finance (B-, 29/100) is ranked just safer, and Blend Pools V2 (B-, 30/100) is ranked just riskier.
See the full Lending sector leaderboard or the Granite vs Blend Pools V2 comparison.
Common Questions about Granite
Plain-English answers based on Granite's scores across Hindenrank's 8 risk dimensions. The highest-scoring (riskiest) dimension is Vitality Risk (6/10).
Has Granite ever been hacked or exploited?
Granite has a fairly clean operational history. The track record dimension scored 5/15, indicating minor or no significant incidents on record. A clean track record is a positive signal but it does not guarantee future safety, especially as protocol complexity grows.
How much money is at stake in Granite?
Granite currently holds roughly $16M in user deposits. Smaller TVL means individual depositors carry a larger share of any loss event, and it can be harder to exit a position quickly during stress.
What's the worst-case scenario for Granite?
Hindenrank has identified specific collapse scenarios for Granite. The most prominent: "sBTC Depeg Causing Mass Liquidation Cascade". The trigger condition is sBTC loses its 1:1 peg to BTC due to a bridge vulnerability, validator failure, or loss of confidence in the Stacks threshold signature model. Reading through the full scenario list on the protocol page is the single best way to understand the actual failure modes — generic "smart contract risk" is rarely the thing that takes a protocol down.
Is Granite regulated or insured?
Granite has low regulatory exposure on Hindenrank's framework (3/10). The protocol is structured in a way that minimizes counterparty and jurisdiction concentration, though regulatory risk in crypto can change rapidly. No DeFi protocol carries FDIC-style insurance — even with low regulatory risk, depositors are not protected in the way bank customers are.
What are the biggest red flags for Granite?
Hindenrank's retail-focused risk audit flagged: Your collateral is in sBTC, which depends on a threshold signature bridge between Bitcoin and Stacks — if this bridge is compromised, your sBTC collateral could lose its BTC peg Stacks has slower block times than Ethereum, which means liquidations may execute with delay during rapid Bitcoin price drops, potentially creating bad debt that affects stablecoin depositors The protocol is relatively new in the Bitcoin DeFi space with limited historical stress-testing during major market downturns
Should beginners deposit into Granite?
Granite is rated B-, which is acceptable for users who understand the protocol's mechanism. Beginners should read the full risk breakdown and only deposit after they can articulate the top three failure modes. If you cannot explain how the protocol works, do not deposit.
How does Granite compare to safer Lending alternatives?
Granite is one protocol in Hindenrank's Lending coverage. The safest Lending protocols on the leaderboard tend to share three traits: a long incident-free track record, conservative mechanism design, and high-quality public documentation. Compare Granite against the full Lending ranking before committing capital.
For the full 8-dimension score breakdown, the radar chart, and dependency graph, see the Granite risk report.
Read the Full Granite Risk Report
This protocol has 2 collapse scenarios. 1 high-severity interaction risks identified. See the full mechanism classification, interaction matrix, and deep-dive recommendations.
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