Elevated risk — counterparty dependency on external asset manager and CEX futures positions, partially offset by USDC-backed stablecoin structure.
Risk Breakdown
Top Risks
Delta-neutral basis trading strategy relies on futures funding rates remaining positive on average — sustained negative funding periods would erode yield and could result in losses for savUSD holders.
Counterparty exposure to centralized exchanges where futures positions are held, as well as to the 0xPartners asset manager which executes trading strategies with discretionary authority.
avUSD's 1:1 USDC backing is straightforward, but savUSD yield depends on opaque off-chain trading strategies that cannot be fully verified on-chain, creating a trust assumption around strategy execution.
As a sub-1-year protocol on Avalanche with limited track record, the basis trading strategy has not been tested through a sustained bear market or negative funding rate environment.
Frequently Asked Questions
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