Carrot Liquidity

Carrot Liquidity receives a C risk grade (43/100) from Hindenrank, where lower scores indicate lower risk. SHUT DOWN — Protocol completed wind-down after May 14, 2026 deadline. Forced deleveraging underway. ~$8M in realized losses from the Drift Protocol exploit. Drift is offering IOU recovery tokens against a ~$3.8M initial pool. Carrot Liquidity is a Solana yield aggregator that automatically routes stablecoin deposits across lending platforms. The protocol shut down after suffering approximately $8M in losses from the Drift Protocol exploit (April 1, 2026). The May 14, 2026 withdrawal deadline has passed and forced deleveraging of remaining positions is underway.

The key risks identified for Carrot Liquidity are: (1) PROTOCOL SHUT DOWN: The May 14, 2026 withdrawal deadline has passed. Forced deleveraging of remaining positions is underway. Any remaining CRT holders should contact the Carrot team immediately. (2) Inherited protocol risks materialized: Carrot's exposure to Drift Protocol's lending markets resulted in approximately $8M in losses when Drift was exploited on April 1, 2026 — demonstrating how routing funds across multiple protocols aggregates third-party risk. (3) No revenue model: Carrot charged zero management fees, which contributed to the decision to shut down once losses reduced TVL to an economically unviable level.

Carrot Liquidity scores 43/100 across eight risk dimensions: Mechanism Novelty: 3/15, Interaction Severity: 9/20, Oracle Surface: 0/10, Documentation Gaps: 2/10, Track Record: 15/15, Scale Exposure: 0/10, Regulatory Risk: 4/10, Vitality Risk: 10/10. The highest risk area is Track Record at 15/15.

Among 119 rated Yield protocols on Hindenrank, Carrot Liquidity ranks #91 by safety (lowest risk score = safest). Its 43/100 risk score and C grade place it among the riskier Yield protocols.

Carrot Liquidity scores 15/15 on the Track Record risk dimension, indicating some history of security incidents or exploits. Higher scores reflect more severe or frequent incidents. Review the full risk report for details.