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Sharpe FinanceDID YOU KNOWnext in 7s
Most depeg events happen on weekends. Market makers don't sleep — they just close their books.
Morpho Blue · Aave V3 · 11 chains · scoring refreshed every 5 min
Most depeg events happen on weekends. Market makers don't sleep — they just close their books.
LDO 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.
Depositing LDO on Ethereum means you lend your tokens to Aave borrowers and earn 0.05% annual yield, paid from the interest borrowers pay. Your deposit is redeemable at the available liquidity ($244.2k on a $261.5k reserve), so withdrawal depends on active borrowing demand. LDO cannot be used as collateral in this reserve — borrowers use it only as a funding source. The 0.05% supply rate comes from the 1.03% borrowers pay, multiplied by the 6.6% utilization rate and reduced by Aave's 20% reserve factor (the share going to the protocol).
Aave governance has flagged no pauses, freezes, or isolation restrictions on LDO, signaling standard operational status.
The 0.05% supply APY reflects very thin borrow demand — only 6.6% of the reserve is loaned out — so the interest rate is suppressed by underutilization. At this rate and usage level, the yield is unlikely to rise unless borrowing demand accelerates materially.
Deterministic risk score is 13/100 (low-moderate composite), and no elevated risks are flagged. The main practical constraint is low utilization: if many depositors want to exit, redeemability could tighten depending on borrow flow.
Good fit only if you accept <0.1% yield and have no liquidity urgency; avoid if you need competitive returns or high redemption certainty on short timescales.
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.
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.