Risks
Participating in EigenYields vaults carries inherent risks. This page outlines the key risk factors you should understand before participating.
Smart Contract Risk
Section titled “Smart Contract Risk”EigenYields vaults rely on smart contracts that may contain bugs or vulnerabilities. While contracts are thoroughly tested, smart contract risk can never be fully eliminated.
Aave Liquidation Risk
Section titled “Aave Liquidation Risk”Vaults deploy capital into Aave lending markets using leverage. If the value of collateral drops significantly relative to borrowed assets, positions may face liquidation. EigenYields mitigates this by operating well below maximum loan-to-value (LTV) ratios using E-mode, but extreme market conditions could still trigger liquidations.
LST Depeg Risk
Section titled “LST Depeg Risk”Liquid staking tokens can temporarily trade below their expected value relative to ETH. A significant depeg event could impact vault NAV and PPS, particularly if the vault holds leveraged positions denominated in the affected LST.
Variable Rate Risk
Section titled “Variable Rate Risk”Borrow and supply rates on Aave and other lending protocols fluctuate based on utilization. Periods of unfavorable rate spreads can reduce or temporarily eliminate vault yield.
Settlement Delay Risk
Section titled “Settlement Delay Risk”There is a delay between queuing a redemption and being able to complete your withdrawal, as redemptions are processed during settlement. Market conditions may change during this window.
Bridge Risk
Section titled “Bridge Risk”For any future cross-chain vaults, bridging assets between chains introduces additional risk from bridge contract vulnerabilities, message delays, or finality issues.