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Risk Audit

Reviewing USDT on Compound V3 (Arbitrum)
LOW RISK
89

Baseline Composition 76.67 pts

USDT
Asset Strength
Compound V3
Protocol Trust
Arbitrum
Chain Security

We start with a weighted average of the asset, protocol, and chain reputation scores.

Safety Bonuses +12 pts

Optimal Utilisation (40-70%)
+12

Safety Score Calculation Methodology

Base Score (Typically 60-80 pts)

Weighted Average Formula:
Base = (Asset Score × 0.4) + (Protocol Score × 0.4) + (Chain Score × 0.2)

Risk Penalties

  • Low TVL (<$1M): -5 to -15 pts
  • Very High Util (>90%): -10 pts (withdrawal risk)
  • Extreme APY (>15%): -5 to -10 pts (volatility risk)
  • Smart Contract Risk: -20 pts if audits are outdated

Deep Dive DeFi Risk Audit Report

Market Risk Assessment

Beyond the code, we assess the financial health of the pool. With a Total Value Locked (TVL) of $32,432,143, this pool exhibits institutional-grade depth. High reserves significantly reduces slippage risks during exits and evidences a high degree of market confidence in the Compound V3 protocol. This depth is critical for institutional participants who require minimal slippage on exit.

Yield Sustainability

The current APY of 2.60% must be weighed against the utilisation rate of 65.03%. The pool maintains an optimal utilisation equilibrium of 65.03%. This evidences a healthy balance between borrowing demand and lending supply, ensuring yields remain competitive without compromising solvency. A sustainable yield is derived from genuine borrower demand, not just inflationary token emissions.

Protocol Security

Compound V3 on Arbitrum has been evaluated for historic exploits. The score of 88.67 integrates the protocol's age and its resilience during previous high-volatility events.

Understanding DeFi Risks

What is Smart Contract Risk? Smart contract risk refers to the possibility of bugs or vulnerabilities in the code governing the protocol. Even audited protocols can suffer exploits if unforeseen vectors are discovered.
What is Financial Risk? Financial risk involves market factors like liquidity crises (inability to withdraw) or asset de-pegging. Our score penalizes low liquidity pools to account for this.
Is the Safety Score a guarantee? No. The score is a probabilistic assessment based on historical data and current metrics. It cannot predict "black swan" events or zero-day exploits.
Data Analysis by MooniTooki
Chief Data Architect @DeFiStar.io Follow on X for real-time alpha and risk updates.

Data Source: Internal indexer. Active Tracking verified at: 04 Dec 2025, 11:04 UTC.
Disclaimer: This audit is an automated analysis tool for educational purposes. Smart contract risk is never zero. Always conduct your own due diligence (DYOR) before depositing funds. Terms of Service apply.

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