Moderate risk — straightforward yield aggregation with clean track record, balanced against multi-protocol dependency and rebasing composability challenges.
Top Risks
1
Third-party protocol dependency — USD+ yield is generated by deploying stablecoins into multiple DeFi protocols (Aave, Compound, etc.). A vulnerability in any underlying protocol could result in loss of the collateral backing USD+.
2
Rebasing mechanism composability — USD+ uses positive rebasing to distribute daily yield. Rebasing tokens can cause accounting issues when used in DeFi protocols that don't properly handle balance changes, potentially leading to value loss.
3
Stablecoin depeg risk — USD+ is pegged 1:1 to USDC and backed by USDC-denominated yield positions. A USDC depeg event would directly impact USD+ holders.
Risk Breakdown
Frequently Asked Questions
Is Overnight Finance safe to use?
Overnight Finance receives a B- risk grade (28/100) from Hindenrank, where lower scores indicate lower risk. Moderate risk — straightforward yield aggregation with clean track record, balanced against multi-protocol dependency and rebasing composability challenges. Overnight Finance issues USD+, a yield-bearing stablecoin pegged 1:1 to USDC that generates returns by deploying collateral across DeFi lending protocols. With $18M TVL, its B grade reflects the straightforward yield aggregation model and clean track record, offset by dependency on multiple underlying DeFi protocols for yield generation.
What are the main risks of using Overnight Finance?
The key risks identified for Overnight Finance are: (1) USD+ generates yield by deploying your USDC into multiple DeFi protocols. If any of these underlying protocols suffers a hack or exploit, the USDC backing your USD+ could be partially lost. (2) USD+ uses a rebasing mechanism where your token balance increases daily. Some DeFi protocols don't properly handle rebasing tokens, which could cause issues if you deposit USD+ into incompatible platforms. (3) USD+ is pegged to USDC. If USDC itself loses its peg (as briefly happened in March 2023), USD+ would be affected as well.
What is Overnight Finance's risk score breakdown?
Overnight Finance scores 28/100 across eight risk dimensions: Mechanism Novelty: 3/15, Interaction Severity: 5/20, Oracle Surface: 2/10, Documentation Gaps: 4/10, Track Record: 3/15, Scale Exposure: 3/10, Regulatory Risk: 4/10, Vitality Risk: 4/10. The highest risk area is Documentation Gaps at 4/10.
How does Overnight Finance compare to other Yield protocols?
Among 112 rated Yield protocols on Hindenrank, Overnight Finance ranks #19 by safety (lowest risk score = safest). Its 28/100 risk score and B- grade place it among the safer Yield protocols.
Has Overnight Finance ever been hacked or exploited?
Overnight Finance scores 3/15 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.