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Sharpe FinanceDID YOU KNOWnext in 7s
The phrase 'unstoppable money' has stopped four times this year. By my count.
Morpho Blue · Aave V3 · 11 chains · scoring refreshed every 5 min
The phrase 'unstoppable money' has stopped four times this year. By my count.
FRAX 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.
When you deposit FRAX on Ethereum, you lend it to borrowers and earn 2.75% APY, paid from the interest those borrowers pay (4.66% borrow rate × 74.5% utilization × 80% after Aave's 20% fee). Your deposit is redeemable at the reserve's available liquidity ($9.8k of $38.6k supplied), but the supply cap is fully consumed — new deposits may fail. FRAX is borrow-only, so it cannot be used as collateral to secure loans.
Aave governance has not flagged this reserve as paused or frozen; the borrow-only restriction and full supply cap signal ongoing scrutiny of FRAX's peg stability and capital efficiency.
The 2.75% supply APY tracks borrow demand at 74.5% utilization — a moderately tight market where rates have room to move if demand rises. The 20% reserve factor (Aave's cut) is standard.
FRAX carries a watch-level depeg signal (43/100 composite score) and the supply cap is completely full, meaning redemptions queue against just $9.8k liquidity for $38.6k in deposits. A depeg event or sudden withdrawal demand could strand capital.
Avoid unless you accept illiquidity risk and can hold through potential FRAX price weakness — the asset's depeg watch and full cap are material constraints.
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.
This reserve isn't usable as collateral, so LTV / Liquidation LLTV / liquidation bonus don't apply. Borrowers can take it against other collateral; suppliers earn the variable rate driven by borrow demand.
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.
Supply cap is 100% filled. New deposits revert once the cap binds; cap raises require an on-chain governance vote.
Sharpe's composite depeg signal reads 43/100 on FRAX (watch band). Aave V3 oracles read Chainlink aggregators — liquidations act on the oracle regardless of spot, so a sharp depeg can either freeze borrowing (if Chainlink updates with delay) or cascade liquidations (if Chainlink tracks fast).