⚠️ DeFi’s Hidden Risk: It’s Not About Oracle Failures… It’s About Exits! 🚨
The illusion of safety in DeFi often comes from pristine oracle data – ratios look good, dashboards are calm. But what happens when you actually try to *leave* a position? That’s where the cracks appear. The price you *can* get, with real depth, right now, can be drastically different from the oracle mark.
@falcon_finance, with its USDf, highlights this perfectly. Collateral is reused, creating a system where clean marks can mask expensive exits. Universal collateral amplifies this, as execution paths multiply and liquidity varies wildly across assets.
Don't mistake on-chain indicators for true comfort. Collateralization ratios show solvency, not ease of exit. Oracles provide a point estimate; markets offer a range. And under stress, that range widens *first*.
The key isn’t just about avoiding oracle failures, but tuning risk limits and liquidation mechanics to *execution reality* – respecting spreads, depth, and the cost of scale. Otherwise, USDf risks becoming “conditional money,” slowing adoption even while appearing solvent.
#DeFi #FalconFinance $FF #LiquidityRisk #RiskManagement 📉
