Risk management

Zunami Protocol team strives to minimize risks associated with the stablecoin farming sector
Depeg is one of the highest risks associated with the stablecoin farming sector. The Terra-issued Luna/UST crash and collapse of Anchor Protocol in May 2022 perfectly indicated that the analysis of the mechanism for maintaining stability is extremely vital. To avoid such pitfalls in the future, Zunami Protocol team has come up with simple rules that will be recommended with DAO voting. These are:
  • A stablecoin must be 100% backed;
  • The collateral must be represented by market-trusted, reliable assets (USDT, USDC, DAI, ETH, BTC) at least 90%;
  • A mechanism for burning stablecoins and liquidating depreciated collateral should be implemented in case volatile assets are accepted as collateral.