stUSDT Risk Assessment | Crypto Daily Digest Sep.25
In July 2023, the TRON introduced its Real World Asset (RWA) product, staked USDT (stUSDT), a receipt token for stablecoins invested into interest-earning RWAs such as short-term government bonds. stUSDT has offered rates consistent with other RWA tokens backed by U.S. Treasuries, ranging between 4–5%. The project has garnered significant TVL in a short period of time. However, it also sparked a lot of controversy.
Llama Risk recently gave a comprehensive analysis of stUSDT. The TLDR of its analysis is:
- While the stUSDT website states that reserves target short-term government bonds, there is no mandate on the portfolio composition, reserves and custodians are not disclosed, and no third-party attestations are available.
- There are uncertainties regarding the legal validity, transparency, and regulatory compliance regarding a custody agreement between RWA DAO and JustLend DAO, creating ambiguity around reserves management.
- EOA accounts controlled by anonymous team members manage on-chain operations such as rate-limited rebasing, handling of user funds, and contract upgrades.
- There are no published smart contract audits or a bug bounty program, and most system contracts have not been verified on Etherscan or Tronscan.
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