Emergency Guardians: mevUSDC removal from USDp backing as a precautionary measure

General Chat
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Earlier today, we’ve been informed of a potential insolvency of Stream Finance’s xUSD as well as several teams have not receiving any answer from the Stream team for several days.

USDp had no direct exposure to xUSD. However, the Silo mevUSDC vault, approved as a reserve asset for USDp on Avalanche and curated by MEV Capital, had lent a significant portion of its AUM to xUSD. With Stream Finance as the primary borrower and unresponsive, we’ve been recommended to reduce our exposure to mevUSDC to zero as a precaution.

Actions taken immediately:

  1. The Emergency Guardians multisig paused minting of USDp using mevUSDC.

  2. The Keepers withdrew all mevUSDC from USDp backing and replaced it with USDC.

  3. The Emergency Guardians multisig paused burning USDp for mevUSDC.

Transaction references:

• Mint pause tx: https://snowtrace.io/tx/0xbc4e5202add0039407fba09b4fc1f90c050257089d0dd5769968d269513cc643

• Burn pause tx: https://snowtrace.io/tx/0xa6c961af1290cfa6df7c48fd72eef606a39e2d758c05ef39f9626ecb698a882e

Current status:

• USDp on Avalanche has no direct or indirect exposure to xUSD
• No losses have been incurred
• USDp on Avalanche is 100% backed by native USDC

Next steps:
We’re evaluating a replacement reserve vault (e.g., a new Silo or Euler vault) and will share a detailed proposal and timelines on the governance forum in the coming days.

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Update:
In collaboration with Gami Labs, a curator we’re working with since the launch of Parallel V3, we agreed to launch a new Silo Vault curated by Gami Labs. This vault is going to replace ymevUSDC in the backing of USDp on Avalanche.
This Vault is denominated in USDC and curated by Gami Labs via their curation infrastructure.
The vault address is available here: https://app.silo.finance/vaults/avalanche/0x1F0570a081FeE0e4dF6eAC470f9d2D53CDEDa1c5?action=deposit

This vault is currently being added by DAO Multisig signers to replace the previously allowed ymevUSDC vault, which was preventively removed from the assets allowed in the USDp vault earlier this month.

Since Silo Vaults are not compatible with the Parallelizer Module, we (Cooper Labs) have wrapped the vault as a Yearn vault (owned by the DAO). We have also deployed the corresponding price feed (immutable).

Addresses:

ygamiUSDC Silo Vault Implementation: (wrapped as a Yearn Vault)

  • Price Feed: Vault Share Exchange Rate + Chainlink USDC/USD
  • Minimum Exposure: 20.00%
  • Maximum Exposure: 95.00%
  • Whitelisted: No
  • Stale Period: 86,400 seconds
  • Mint Fee: 0.00%
  • Burn Fee: 0.05%

Since the new vault is denominated in the same token (USDC) and allowed in the backing of USDp with the same parameters as the previous one, we did not believe it necessary to proceed with a DAO vote.

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:ok_hand: thank you, good job

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