Is mStable Safe?
Risk Grade: C (45/100)
mStable is rated as elevated risk — multiple novel mechanisms and notable interaction risks.
mStable's mPT-sUSDe vault offers compelling yield but carries significant risk from its leveraged, multi-protocol architecture. Suitable only for risk-aware DeFi users who understand the liquidation mechanics. Not appropriate for conservative stablecoin holders seeking safe yield.
mStable's mPT-sUSDe vault offers ~15% APY by combining Ethena's sUSDe yield with Pendle fixed-rate tokens and Aave leveraged looping (up to 7.5x). This is a sophisticated yield strategy that stacks three DeFi protocols together. While the returns are attractive, the leverage means losses are amplified — a modest stablecoin depeg could trigger cascading liquidations. The original mStable protocol was rebuilt in late 2025 with this new vault architecture.
TVL
$3M
Mechanisms
5
Interactions
5
Value Grade
C+
Key Risks for mStable Users
High leverage (7.5x) means small price moves cause big losses
Depends on Ethena's basis trade working — if funding rates flip negative, yield disappears
Three protocols stacked together means three times the smart contract risk
New vault architecture with limited track record despite the mStable name
Top Risk Factors
- •Leveraged Aave looping (up to 7.5x) amplifies losses if sUSDe depegs or Pendle PT matures unfavorably
- •Multi-layer smart contract risk spanning Ethena, Pendle, and Aave — any single exploit cascades through the vault
- •Ethena counterparty exposure: sUSDe depends on centralized exchange basis trades that can unwind during market stress
- •Pendle PT maturity mismatch risk: locked fixed-rate positions may suffer losses if redeemed early or rolled at worse rates
How mStable Compares to Peers
mStable ranks #99 of 116 Yield protocols (bottom quartile — among the riskiest). At a risk score of 45/100, it's 8 points riskier than the sector average of 37/100.
Adjacent peers: Looped Hype (C, 44/100) is ranked just safer, and Goose (C, 45/100) is ranked just riskier.
See the full Yield sector leaderboard or the mStable vs Goose comparison.
Common Questions about mStable
Plain-English answers based on mStable's scores across Hindenrank's 8 risk dimensions. The highest-scoring (riskiest) dimension is Mechanism Novelty (10/15).
Has mStable ever been hacked or exploited?
mStable 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 mStable?
mStable currently holds under $3M in user deposits — small enough that liquidity events could affect exits. 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 mStable?
Hindenrank has identified specific collapse scenarios for mStable. The most prominent: "sUSDe Depeg Cascade Through Leveraged Loop". The trigger condition is sUSDe depegs >5% due to Ethena basis trade unwind or CEX counterparty failure. 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 mStable regulated or insured?
mStable 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 mStable?
Hindenrank's retail-focused risk audit flagged: High leverage (7.5x) means small price moves cause big losses Depends on Ethena's basis trade working — if funding rates flip negative, yield disappears Three protocols stacked together means three times the smart contract risk On the technical side, 1 critical-severity interaction risk has been identified.
Should beginners deposit into mStable?
mStable's C grade puts it in the elevated-risk band. This is not a beginner-friendly protocol. Anyone depositing here should treat the position as speculative and avoid concentrating significant savings in it.
How does mStable compare to safer Yield alternatives?
mStable is one protocol in Hindenrank's Yield coverage. The safest Yield protocols on the leaderboard tend to share three traits: a long incident-free track record, conservative mechanism design, and high-quality public documentation. Compare mStable against the full Yield ranking before committing capital.
For the full 8-dimension score breakdown, the radar chart, and dependency graph, see the mStable risk report.
Read the Full mStable Risk Report
This protocol has 2 collapse scenarios. 1 critical and 2 high-severity interaction risks identified. See the full mechanism classification, interaction matrix, and deep-dive recommendations.
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