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Sharpe FinanceDID YOU KNOWnext in 7s
Every major DeFi exploit this cycle has been a 3-line bug. Almost never a clever exploit.
Morpho Blue · Aave V3 · 11 chains · scoring refreshed every 5 min
Every major DeFi exploit this cycle has been a 3-line bug. Almost never a clever exploit.
BTC.b supply on Aave V3 (Ethereum). Read-only on Sharpe — deposits, withdrawals, and borrows execute on app.aave.com. We surface parameters, rates, and risk so you can compare this reserve against Morpho vaults on the same asset cohort.
Plain-English summary of this vault — what it does, who runs it, where the yield comes from, and what could break it. Generated from the same deterministic inputs shown elsewhere on this page; the numbers are the source, this is just the explanation.
You deposit BTC.b—a Bitcoin-backed token—and it gets lent out to borrowers on Ethereum. Right now there are no active borrowers, so you earn 0% APY. Your deposit is redeemable at full liquidity since all $4.42M supplied is available. BTC.b is enabled as collateral, meaning borrowers can use it to secure loans; Aave will seize it if a borrower's collateral value falls below 78% of their debt.
Aave governance has not flagged this reserve for pause, freeze, or isolation. The reserve is live and operating under standard parameters.
Supply APY is zero because utilization is 0%—no one is borrowing BTC.b. The formula is borrow APY × utilization × (1 − reserve factor); with zero demand, the rate stays at zero. This will change only if borrowers begin using BTC.b as collateral and taking loans against it.
BTC.b's issuer is not identified in Aave's registry, creating opacity around redemption mechanics and freeze risk. The 13/100 risk score reflects low severity flags overall, but unidentified issuance is a structural concern for any wrapped or synthetic asset.
Avoid unless you're comfortable holding an unidentified-issuer BTC token and expecting zero yield in the near term. Only suitable if you need collateral access and believe borrowing demand will emerge.
On Aave V3, a supplier can withdraw up to the reserve's available liquidity instantly. Above that, the withdrawal must wait for borrowers to repay or new suppliers to deposit. Markets at 95%+ utilization can keep large redemptions waiting for hours to days at current rates.
Reserve parameters are set by Aave governance (BGD Labs + Aave Chan Initiative + Risk Council). Listings, caps, IRM curves, and LLTVs change through on-chain votes.
On Aave V3, supply APY = borrow APY × utilization × (1 − reserve factor). There is no curator skim; the only intermediation cost is the reserve factor, which funds the Aave treasury. No emissions slice in v1 of this integration — the headline is fully sustainable.
Aave V3 reserves carry parameter risk (LTV/LLTV adequacy vs collateral volatility), liquidity risk (high utilization slows exit), and depeg risk on the underlying. Governance can pause / freeze / adjust caps in response to incidents. Sharpe's full risk decomposition for Aave reserves rolls in v1.1.
How the composite risk score breaks down. Every number traces to an explicit input — /methodology documents each factor's formula.
Per-collateral decomposition: Sharpe-style realized σ from 30 daily log returns, blended 50/50 with the asset-taxonomy tier fallback. Phase 2 will replace the tier slot with liquidity depth, mechanism classification, and holder concentration. Methodology in /methodology.
The honest version. Every structural failure mode this vault is exposed to, ranked by severity. If you want to know whether to invest, start here.
Aave V3 prices and liquidations route through Chainlink's aggregator feed for this asset. A stale, manipulated, or wrong-side update is the protocol's largest single-point-of-failure for this reserve. Chainlink has a strong track record but the failure mode is binary.
Aave V3 has been live since March 2022 with significant TVL and continuous third-party audits. Historical incidents have been contained but the protocol surface is large (Pool / aTokens / debtTokens / IRM / Oracle / UiHelpers). Treat as bounded but non-zero tail risk.