Risk-curator boom in 2025 now blamed for recent DeFi lending vault troubles

Risk curators shifted the balance of DeFi in ￰0￱ new players came to attention after several lending vaults faced low liquidity and some caused deep losses for ￰1￱ curators faced one of their big tests, after a series of DeFi vaults caused losses, or kept user funds stuck with no ￰2￱ the past few days, vaults that accepted risky stablecoins as collateral in exchange for less risky USDT, USDC, or USD1, caused a series of bad ￰3￱ curators became highly competitive in 2025, leading to the creation of new types of lending vaults. |) November 6, 2025 As Cryptopolitan reported earlier, the vault’s locking was caused by the crash in the deUSD stablecoin by Elixir ￰4￱ crashed as a sign of contagion, due to exposure to Stream ￰5￱ before suspending one of its vaults, Gauntlet claimed all its lending selections were safe, with no risk exposure.

Compound, however, was willing to accept some of the riskier stablecoins, thus allowing risk curators to build the currently locked ￰6￱ Labs , MEV Capital, and other curators have now isolated their problem vaults, and are considering recourse for the lenders. However, the vaults no longer accept deposits and have been ￰7￱ theory, liquidity could return if the depositors repaid their loans, but they would receive a depreciated ￰8￱ a whole, risk curator protocols carry $7.5B in total value locked, around 10% of the deposits held in lending ￰9￱ main danger of contagion may spread from vaults that use risky assets, especially de-pegging ￰10￱ the past three days, the value locked in curated vaults crashed from a peak of $10B, signaling a rush to withdrawals where ￰11￱ stablecoins traded below peg, most notably USDX, as well as ￰12￱ also traded at $0.76.

The biggest risk comes from stablecoins not backed by any assets, but deriving their value from algorithmic ￰13￱ Morpho vaults have high utilization The ability to borrow more reliable stablecoins against riskier ones meant a rush to take out loans, with no fear of liquidation. Currently, borrowers are liquid, while lenders see themselves locked out of the vaults, with no way of recouping their ￰14￱ Morpho, the riskiest vaults were closed for deposits. However, dozens of other vaults had 100% utilization , meaning withdrawals were ￰15￱ up to $30,050 in trading rewards when you join Bybit today