Next Steps: Withdrawing funds from M11 Credit's wETH lending pool on Maple Finance v2

[BraveNewDeFi]

@0xSpicySoup

Last time a figure was mentioned, 2,461 ETH losses were expected for Orthogonal Trading loans. No figure had been given yet for Auros. Can we get an update here, are these still the latest and most accurate figures or have they been revised since?

The information included in the update is the latest information that is available. The Nexus Mutual Enzyme vault uses Chainlink Proof of Reserve to calculate the assets in the M11 Credit wETH pool. Now that the wETH lending pool has been updated to reflect that all Orthogonal Trading loans have defaulted, the vault’s NAV is now shown as 13,120.881 WETH. Based on the original deposit + interest accrued, this represents a 1.56% loss to the capital pool according to my calculations.

@0xSpicySoup

Delegating to the investment team is the clear choice here. Though maybe a separate conversation should be held about whether the current members of the investment team members should remain, or if some should be rotated for new members in light of this incident?

The current DAO teams are due to post renewal proposals in January. The last proposal was put up for review in July 2022 and was voted and approved by members in August. You can read those past proposals on the forum:

• Nexus Hubs: Proposed Teams, Priorities, and 6-month Budget Breakdown
• Nexus Hubs V2 Proposal

You can always raise that issue in a separate forum post, if you’d like.

@0xSpicySoup

Risk reward in recent weeks on Maple was arguably insufficient vs LSDs (pointed out by @vincentj back in August). As I understand it, there was a limited window for withdrawals due to a cooldown period after depositing.

While @vincentj did make this point, he shared his comment on 22 August, which was 11 days after the vote ended and 7 days after the funds were deployed on Maple in the wETH lending pool. During the 3-month review period, the members who shared comments largely expressed support with @DeFi_Dad asking questions on 10 August after the vote had transitioned to an on-chain vote, which was open from 8 August to 11 August.

@0xSpicySoup

Was there a period when withdrawals were possible at any stage since the funds had been deposited? Was the investment team aware of the r/r relative to LSDs., and did they consider taking any action to withdraw funds for safer alternatives?

On potential to withdraw–there is a 90-day lockup period for deposits to M11 Credit’s wETH lending pool, which was highlighted in the original proposal. Once the lockup period ended, the withdrawal request would have had to be submitted, which starts a 10-day cool-down process. The earliest any available funds could have been withdrawn would have been 24-25 November. However, the M11 Credit team didn’t share any concerns about borrowers in the wETH pool until after that time, with the first announcement occurring on 30 Nov and the Orthogonal Trading issues weren’t shared until the following week.

Not all funds could have been withdrawn in any event, as the mutual can only withdraw the wETH that is free in the pool and isn’t lent out to borrowers.

While the mutual initiated a withdrawal request to withdraw any available capital in the pool last week, the migration to Maple v2 reset that withdraw request timer, as noted above.

On risks–yes, the risks were highlighted in the original forum proposal with links to supporting resources that highlighted the risks regarding lending to Maple.

You can verify this information by checking the relevant posts on the forum and reviewing the Enzyme vault, as well.