Yearn — yvUSDS-1

Contract Addresses

Core yvUSDS-1 Contracts

Contract	Address	Type
yvUSDS-1 Vault	0x182863131F9a4630fF9E27830d945B1413e347E8	Yearn V3 Vault (v3.0.3), Vyper minimal proxy
Underlying asset (USDS)	0xdC035D45d973E3EC169d2276DDab16f1e407384F	Sky USDS stablecoin
Accountant	0x5A74Cb32D36f2f517DB6f7b0A0591e09b22cDE69	Shared Yearn Accountant (0% mgmt, 10% perf)
Fee Recipient (Dumper)	0x590Dd9399bB53f1085097399C3265C7137c1C4Cf	Claims fees and routes to auctions/splitters

Governance Contracts (shared with all Yearn V3 risk-1 vaults)

Contract	Address	Configuration
Yearn V3 Role Manager	0xb3bd6B2E61753C311EFbCF0111f75D29706D9a41	Single instance for all category-1 vaults
Daddy / ySafe (Governance)	0xFEB4acf3df3cDEA7399794D0869ef76A6EfAff52	6-of-9 Gnosis Safe — holds 12 of 14 vault roles
Brain (Operations)	0x16388463d60FFE0661Cf7F1f31a7D658aC790ff7	3-of-8 Gnosis Safe — QUEUE, REPORTING, DEBT, DEPOSIT_LIMIT, EMERGENCY
Security	0xe5e2Baf96198c56380dDD5E992D7d1ADa0e989c0	4-of-7 Gnosis Safe — DEBT, MAX_DEBT, EMERGENCY
Strategy Manager (Timelock)	0x88Ba032be87d5EF1fbE87336b7090767F367BF73	TimelockController — 7-day delay for strategy additions and accountant changes. Self-governed (TIMELOCK_ADMIN held by the timelock itself)
Keeper	0x604e586F17cE106B64185A7a0d2c1Da5bAce711E	yHaaSRelayer — REPORTING only
Debt Allocator	0x1e9eB053228B1156831759401dE0E115356b8671	Minimal proxy — REPORTING + DEBT_MANAGER

Yearn V3 Infrastructure

Contract	Address
Vault Factory (v3.0.3)	0x5577EdcB8A856582297CdBbB07055E6a6E38eb5f
Vault Original (v3.0.3)	0xcA78AF7443f3F8FA0148b746Cb18FF67383CDF3f

Active Strategies (3 in default queue, 2 with debt)

Default queue order at block 25073237:

#	Strategy	Name	Activation	Current Debt (USDS)	Allocation
1	0x0868076663Bbc6638ceDd27704cc8F0Fa53d5b81	USDS Sky Rewards Compounder	2025-05-16	0	0%
2	0xc9f01b5c6048B064E6d925d1c2d7206d4fEeF8a3	Spark USDS Compounder	2025-07-14	1,378,654.31	19.97%
3	0x3F2dE801629116A83B9734bB72012A554e01CfC1	sUSDS Lender	2025-05-15	5,524,421.92	80.03%

Removed from queue at prior reshape (between April 27 and May 5, still absent at May 11):

• Aave V3 Lido USDS Lender (0xC08d81aba10f2dcBA50F9A3Efbc0988439223978)
• Aave V3 USDS Lender (0xD144eAFf17b0308a5154444907781382398AaC61)

Current funding posture: 80.03% in sUSDS Lender (Sky Savings vault) and 19.97% in Spark USDS Compounder (Sky USDS Staking Rewards). The May 5 single-venue 100% posture was reversed within 6 days: Brain re-funded sUSDS Lender and reduced the Spark Compounder share. The USDS Sky Rewards Compounder remains queued at 0 debt. Last reports: Spark Compounder 2026-05-10 (last_report = 1778389175), sUSDS Lender 2026-05-10 (last_report = 1777868495), USDS Sky Rewards Compounder 2026-02-05 (still stale, consistent with zero allocated debt).

Strategy Protocol Dependencies

Protocol	Strategy	Allocation
Sky (sUSDS Savings Rate)	sUSDS Lender	80.03%
Sky / Spark (USDS Staking Rewards SPK farm)	Spark USDS Compounder	19.97%
Sky USDS Staking (alt compounder)	USDS Sky Rewards Compounder	0% (queue only)

Audits and Due Diligence Disclosures

Yearn V3 Core Audits

The underlying vault infrastructure (v3.0.0 baseline) has been audited by 3 reputable firms:

Auditor	Date	Scope	Report
Statemind	May 2, 2024	V3 Vaults (v3.0.0)	PDF
ChainSecurity	May 4, 2024	V3 Vaults + Tokenized Strategy (v3.0.0)	2 PDFs
yAcademy	Jun 2024	V3 Vaults (v3.0.1)	PDF

The v3.0.3 patch release used by yvUSDS-1 was reviewed internally by the Yearn team rather than re-engaging external auditors. The diff from v3.0.2 is a minor patch-level change; the external audits cover the core architecture. Source: yearn-vaults-v3 GitHub releases.

Sky / MakerDAO Audits (Underlying Protocol)

Sky (formerly MakerDAO) is one of the most extensively audited DeFi protocols:

Auditor	Coverage	Notes
ChainSecurity	9 audits covering USDS, sUSDS, Endgame Toolkit, LockStake, VoteDelegate	Core security partner
Cantina	10 audit reports including sUSDS (Sep 2024) and USDS (Jul 2024)	Comprehensive coverage
Sherlock	Public audit contest (Aug 2024)	Community audit
Trail of Bits	Core DAI system (legacy MCD)	Historical audit
PeckShield	Core DAI system (legacy MCD)	Historical audit
Quantstamp	Liquidations 2.0	Historical audit
ABDK	Vote Delegate security	Governance audit

USDS Staking Rewards / SPK farm: part of the Sky Endgame stack and reviewed under the same Sky / Spark audit umbrella (ChainSecurity, Cantina).

Strategy Review Process

All strategies pass through Yearn's formal 12-metric risk-scoring framework (RISK_FRAMEWORK.md) — review level (ySec security review), test coverage, complexity (sLOC), risk exposure, centralization risk, protocol integration count, etc. yvUSDS-1 is registered as Category 1 in the Role Manager (getCategory(vault) == 1), the strictest tier.

Bug Bounty

• Yearn (Immunefi): active bug bounty. Max payout: $200,000 (Critical). Scope includes V3 vaults. 40 smart contracts in scope. Median resolution: 18 hours
  • https://immunefi.com/bounty/yearnfinance/
• Yearn (Sherlock): also listed at https://audits.sherlock.xyz/bug-bounties/30
• Sky / MakerDAO (Immunefi): active bug bounty. Max payout: $10,000,000 (Critical). Scope includes DAI, USDS, sUSDS, PSM, USDS Staking Rewards
  • https://immunefi.com/bug-bounty/sky/
• Safe Harbor (SEAL): Yearn is not listed on the SEAL Safe Harbor registry

On-Chain Complexity

The yvUSDS-1 system is low complexity:

• 1 funded strategy on a single chain (Ethereum), inside the Sky ecosystem
• No conversion hops — the underlying asset (USDS) is the same as Sky's native staking token. The Spark Compounder stakes USDS directly into the Sky USDS Staking Rewards contract
• No leverage, no looping, no cross-chain bridging
• Standard ERC-4626 deposit/withdrawal
• Blue-chip protocol dependency (Sky / Spark)
• Vault is immutable (non-upgradeable Vyper minimal proxy)

The main accounting subtlety is the SPK reward harvest: the Spark Compounder periodically claims SPK from the staking contract and swaps it back to USDS. This is a standard reward-harvesting pattern; SPK price exposure between harvests is small relative to vault TVL.

Historical Track Record

• Vault deployed: October 8, 2024 (deployment tx) — ~19.1 months in production
• TVL: 6,903,076.23 USDS at the May 11 snapshot — well within the 100M USDS deposit limit. TVL is up ~14.9% from the May 5 snapshot of ~6.01M; still down ~80% from the pre-redirection ~35.24M April 27 high
• PPS trend: 1.000000 → 1.097528 (~9.75% cumulative return over ~19.1 months, ~6.0% annualized)
• Security incidents: None known for this vault or for the Yearn V3 framework generally
• Strategy changes (May 5 → May 11): Brain re-funded the sUSDS Lender from 0 → 5.52M USDS (80.03% of TVL), and reduced the Spark USDS Compounder allocation from 100% to 1.38M USDS (19.97%). The 3-strategy queue composition is unchanged
• Prior reshape (April 27 → May 5): Aave V3 Lido USDS Lender and Aave V3 USDS Lender both removed from the default queue; sUSDS Lender debt was drained to zero. yvUSDC-1's USDC to USDS Depositor strategy stopped routing into this vault and yvUSDC-1 redirected USDC into a new direct-to-sUSDS strategy
• Yearn V3 track record: V3 framework has been live since May 2024 (~24 months). No V3 vault exploits

Yearn protocol TVL: ~$197.5M total across all chains (DeFiLlama, April 2026). Ethereum dominant at ~$149.6M.

Sky / sUSDS / USDS Staking track record:

• USDS launched as part of Sky Endgame (2024)
• sUSDS TVL: ~$5.38B (Sky Savings vault) plus broader USDS / sUSDS supply across the ecosystem
• USDS Staking Rewards (SPK farm) — part of the Sky tokenomics, distributes SPK governance token to USDS stakers
• No security incidents on USDS / sUSDS / USDS Staking since launch

Funds Management

yvUSDS-1 is 100% deployed across two strategies at the May 11 snapshot: sUSDS Lender (~80.0%) depositing into the Sky Savings vault, and Spark USDS Compounder (~20.0%) staking USDS into the Sky USDS Staking Rewards contract. The third queued strategy (USDS Sky Rewards Compounder) holds zero debt.

Strategy 1: sUSDS Lender (~80.0% allocation)

Contract: 0x3F2dE801629116A83B9734bB72012A554e01CfC1

Mechanic:

1. Deposit: USDS deposited directly into the Sky Savings vault sUSDS (0xa3931d71877C0E7a3148CB7Eb4463524FEc27fbD), an ERC-4626 wrapper over the Sky pot. Position accrues the Sky Savings Rate (SSR) continuously on-chain.
2. Withdraw: Atomic — strategy calls redeem() on sUSDS to unwind into USDS.

Risk profile: Direct dependency on the Sky Savings Rate / sUSDS contract. No reward token exposure (yield is paid as USDS via SSR rate accrual). The dominant risk is at the Sky pot / sUSDS level — first-party Sky infrastructure with multi-billion sUSDS TVL.

Strategy parameters:

• Activated: 2025-05-15
• Last reported: 2026-05-10 (last_report = 1777868495)
• Management: Brain multisig (3-of-8) and Debt Allocator
• Keeper: yHaaSRelayer (0x604e586F17cE106B64185A7a0d2c1Da5bAce711E)

Strategy 2: Spark USDS Compounder (~20.0% allocation)

Contract: 0xc9f01b5c6048B064E6d925d1c2d7206d4fEeF8a3

Mechanic:

1. Stake: USDS is deposited into the Sky USDS Staking Rewards contract (0x173e314C7635B45322cd8Cb14f44b312e079F3af). Staked USDS remains 1:1 redeemable; staking unlocks the right to accrue SPK rewards.
2. Harvest: The strategy's keeper periodically claims accrued SPK (0xc20059e0317DE91738d13af027DfC4a50781b066) and converts it back to USDS, compounding the principal.
3. Withdraw: Atomic — strategy unstakes USDS from the Staking Rewards contract.

Risk profile: SPK token price exposure exists between harvest cycles, but the principal is held as USDS and is unstaked 1:1. The dominant risk is at the Sky USDS Staking Rewards contract / SPK token level — both are part of the audited Sky/Spark stack.

Strategy parameters:

• Activated: 2025-07-14
• Last reported: 2026-05-10 (last_report = 1778389175)
• Management: Brain multisig (3-of-8) and Debt Allocator
• Keeper: yHaaSRelayer (0x604e586F17cE106B64185A7a0d2c1Da5bAce711E)

Queued (zero current debt): USDS Sky Rewards Compounder

Contract: 0x0868076663Bbc6638ceDd27704cc8F0Fa53d5b81

Alternate compounder strategy targeting the same Sky USDS Staking Rewards venue as the funded Spark Compounder. current_debt = 0 at the snapshot; activated 2025-05-16; last reported 2026-02-05 (~3 months stale, consistent with no allocated debt). Keeping it in the queue gives Brain a second on-chain implementation if the primary Spark Compounder needed to be paused.

Removed from default queue (at the April 27 → May 5 reshape; still absent at May 11)

• Aave V3 Lido USDS Lender (0xC08d81aba10f2dcBA50F9A3Efbc0988439223978)
• Aave V3 USDS Lender (0xD144eAFf17b0308a5154444907781382398AaC61)

The rationale for removing both Aave V3 USDS strategies has not been independently verified. Reintroducing either would require a fresh addStrategy() proposal at the Strategy Manager TimelockController (7-day delay).

Accessibility

• Deposits: Permissionless — anyone can deposit USDS and receive yvUSDS-1 (ERC-4626 standard). Subject to 100M USDS deposit limit
• Withdrawals: ERC-4626 standard. Users redeem yvUSDS-1 for USDS. Pipeline unwinds across both funded strategies: sUSDS Lender (~80%) calls redeem() against the Sky Savings vault; Spark Compounder (~20%) unstakes USDS from the Sky USDS Staking Rewards contract. Both are atomic against multi-billion-USDS underlying capacity
• No cooldown or lock period
• Fees: 0% management fee, 10% performance fee (taken via accountant during process_report)
• Profit unlock: 3 days

Collateralization

• 100% on-chain USDS backing. All deposits are USDS, deployed into two first-party Sky-ecosystem yield products (Sky Savings vault sUSDS, USDS Staking Rewards)
• Collateral quality: USDS itself is backed by Sky's over-collateralized loan book and RWA Treasury bill investments (inherited from MakerDAO). Both sUSDS and USDS Staking Rewards are first-party Sky contracts
• No leverage — both active strategies are simple deposit/stake products, no borrowing
• Positions are fully redeemable — sUSDS supports ERC-4626 redeem against the Sky pot; USDS Staking Rewards unstaking is 1:1

Provability

• yvUSDS-1 exchange rate: Calculated on-chain via ERC-4626 standard (convertToAssets() / convertToShares()). Fully programmatic, no admin input
• Strategy positions: The sUSDS Lender's totalAssets() reads the sUSDS share balance and converts to USDS via the on-chain pot rate. The Spark Compounder's totalAssets() reads the underlying staking balance from Sky's USDS Staking Rewards contract on-chain
• Sky Savings Rate (SSR): Set by Sky Governance, applied on-chain via the pot dsr mechanism. sUSDS exchange rate increases continuously
• SPK reward rate: Set by Sky / Spark governance and visible on-chain via the Staking Rewards contract
• Profit / loss reporting: Profits are reported by keepers via process_report() and locked for gradual distribution over 3 days (profitMaxUnlockTime = 3 days). Losses are immediately reflected in PPS

Liquidity Risk

• Primary exit: Redeem yvUSDS-1 for USDS via ERC-4626 withdraw() / redeem(). Triggers strategy withdraw() calls across both funded legs — sUSDS Lender redeems against the Sky Savings vault (~80%), Spark Compounder unstakes from Sky USDS Staking Rewards (~20%). Both unwind atomically in the same transaction
• Highly liquid underlying: the Sky Savings vault holds ~$5.38B+ in sUSDS; the USDS Staking Rewards contract holds multi-billion USDS staked. yvUSDS-1's 6.90M USDS is a tiny fraction of either underlying capacity
• No DEX liquidity needed — both exits are via Sky's own contracts (redeem / unstake), not DEX AMMs
• Same-value asset: USDS-denominated vault token — no price-divergence risk from the underlying
• No withdrawal queue or cooldown — atomic redemption
• Deposit limit: 100M USDS cap — generous relative to current TVL of 6.90M USDS
• Two-venue diversification: unwind capacity is split across two distinct Sky contracts (Savings vault and USDS Staking Rewards). A pause / migration of either contract would only block ~20% or ~80% of redemptions atomically; Brain could re-route the affected share to the other (and the queued USDS Sky Rewards Compounder is also fundable)

Note on cascading withdrawals: yvUSDC-1 no longer routes through this vault (its USDC to USDS Depositor strategy holds 0 USDC at the snapshot). yvDAI-1 still routes ~27.0% (~2.56M DAI) directly here via DAI to USDS Depositor. Large coordinated withdrawals from yvDAI-1 will translate into pressure on the funded sUSDS Lender / Spark Compounder; each layer settles atomically in the same transaction.

Centralization & Control Risks

Governance

The yvUSDS-1 vault uses the standard Yearn V3 governance pattern via the Yearn V3 Role Manager contract — identical configuration to the other five risk-1 vaults.

Governance hierarchy:

Position	Address	Threshold	Roles on Vault
Daddy (ySafe)	0xFEB4acf3df3cDEA7399794D0869ef76A6EfAff52	6-of-9	12 of 14 vault roles (all except ADD_STRATEGY_MANAGER and ACCOUNTANT_MANAGER)
Brain	0x16388463d60FFE0661Cf7F1f31a7D658aC790ff7	3-of-8	QUEUE, REPORTING, DEBT, MAX_DEBT, DEPOSIT_LIMIT, WITHDRAW_LIMIT, PROFIT_UNLOCK, DEBT_PURCHASER, EMERGENCY
Security	0xe5e2Baf96198c56380dDD5E992D7d1ADa0e989c0	4-of-7	DEBT, MAX_DEBT, EMERGENCY
Strategy Manager (Timelock)	0x88Ba032be87d5EF1fbE87336b7090767F367BF73	7-day delay	ADD_STRATEGY, REVOKE_STRATEGY, FORCE_REVOKE, ACCOUNTANT, MAX_DEBT
Keeper	0x604e586F17cE106B64185A7a0d2c1Da5bAce711E	Bot	REPORTING only
Debt Allocator	0x1e9eB053228B1156831759401dE0E115356b8671	Bot	REPORTING + DEBT_MANAGER

ySafe 6-of-9 multisig signers include publicly known contributors: Mariano Conti (ex-MakerDAO), Leo Cheng (C.R.E.A.M.), 0xngmi (DeFiLlama), Michael Egorov (Curve), and others (source).

Governance assessment:

1. No EOA role concentration — all sensitive roles are held by multisigs, the timelock, or automated bots
2. Strategy additions and accountant changes pass through a 7-day timelock (getMinDelay() = 604800)
3. Self-governed timelock — TIMELOCK_ADMIN belongs to the timelock itself; reducing the delay also requires 7 days. DEFAULT_ADMIN was never granted (admin = address(0))
4. Standard Yearn governance — same pattern shared across 37+ vaults
5. Immutable vault — no proxy upgrade path

Programmability

• Exchange rate (PPS): Calculated on-chain algorithmically via ERC-4626. Fully programmatic, no admin input
• Vault operations: Deposit / withdraw are permissionless on-chain transactions
• Strategy profit / loss: Reported programmatically by keepers via process_report(). Profits unlock linearly over 3 days
• Debt allocation: Managed by both the Debt Allocator (automated) and Brain multisig (manual)
• V3 vaults are immutable — no proxy upgrades, no admin-changeable implementation

External Dependencies

Dependency	Criticality	Notes
Sky / sUSDS (Sky Savings Rate)	Critical	~80% of allocation via the sUSDS Lender. ~$5.38B sUSDS TVL. First-party Sky contract
Sky USDS Staking Rewards	Critical	~20% of allocation via Spark USDS Compounder. Core part of the Sky Endgame tokenomics; SPK rewards distributed to USDS stakers
USDS itself	Critical	The underlying asset of the vault — failure of USDS would be terminal regardless of strategy mix
SPK token	Low	Reward token sold back to USDS during compounding. SPK price exposure between harvests is small relative to vault TVL but non-zero
Sky USDS Staking (alt compounder)	Standby	USDS Sky Rewards Compounder is in the queue with 0 debt. Available as on-chain fallback

Dependency quality: both funded dependencies are first-party Sky / Spark contracts plus the underlying USDS token. Sky has 8+ years of history (inheriting MakerDAO's track record), $5.38B in sUSDS, and a $10M bug bounty. The concentration improved materially since the May 5 snapshot: from 100% single-venue (USDS Staking Rewards) to a two-venue 80/20 split across functionally distinct Sky contracts (Savings Rate vs Staking Rewards). A pause / bug in one of the two would impair only its respective share, with the queued USDS Sky Rewards Compounder providing an additional on-chain fallback.

Operational Risk

• Team: Yearn Finance — established since 2020, publicly known contributors. The ySafe 6-of-9 has 9 named signers including prominent DeFi figures
• Governance: Standard Yearn V3 Role Manager — same pattern across 37+ vaults
• Documentation: Comprehensive Yearn V3 documentation. Strategy code verified on Etherscan
• Legal: Yearn Finance has converted ychad.eth into a BORG via YIP-87, wrapping it in a Cayman Islands foundation
• Incident response: Yearn has demonstrated incident response across 4 historical events (all V1 / legacy). V3 framework has not been tested under stress. The $200K Immunefi bug bounty provides a responsible disclosure channel
• V3 immutability: Vault contracts cannot be upgraded — eliminates proxy upgrade risk but means bugs cannot be patched in place; a critical bug requires deploying a new vault and migrating users
• Recent allocation activity (May 5 → May 11): Brain re-funded the sUSDS Lender from 0 → 5.52M USDS (80.03%) and trimmed the Spark Compounder share from 100% → 19.97% (1.38M USDS). This re-diversifies the dependency profile across two distinct Sky contracts. TVL also recovered ~14.9% in the same window
• Prior reshape (April 27 → May 5): sUSDS Lender debt drained from ~7.4% to 0; two Aave V3 USDS strategies removed from the default queue; vault TVL dropped ~83% (largely upstream-driven, as yvUSDC-1 redirected its USDC→USDS routing). Rationale not independently verifiable on-chain

Monitoring

Existing Monitoring Infrastructure

Yearn maintains an active monitoring system via the monitoring repository. yvUSDS-1 is actively monitored:

• Large flow alerts (yearn/alert_large_flows.py): runs hourly via GitHub Actions. yvUSDS-1 is in the monitored vault list. Alerts on deposits / withdrawals exceeding threshold via Telegram
• Endorsed vault check (yearn/check_endorsed.py): runs weekly, verifies all Yearn V3 vaults are endorsed on-chain via the registry contract
• Timelock monitoring (timelock/timelock_alerts.py): monitors the Yearn TimelockController (Strategy Manager) across 6 chains

Key Contracts

Contract	Address	Monitor
yvUSDS-1 Vault	0x182863131F9a4630fF9E27830d945B1413e347E8	PPS (convertToAssets(1e18)), totalAssets(), totalDebt(), totalIdle(), Deposit / Withdraw events
sUSDS Lender (funded)	0x3F2dE801629116A83B9734bB72012A554e01CfC1	totalAssets(), current_debt, isShutdown(), keeper report frequency
Spark USDS Compounder (funded)	0xc9f01b5c6048B064E6d925d1c2d7206d4fEeF8a3	totalAssets(), current_debt, isShutdown(), keeper report frequency
USDS Sky Rewards Compounder (queued, 0 debt)	0x0868076663Bbc6638ceDd27704cc8F0Fa53d5b81	current_debt re-funding event, last_report resumes, isShutdown()
Sky USDS Staking Rewards	0x173e314C7635B45322cd8Cb14f44b312e079F3af	Reward rate (SPK / sec), total staked, paused state
Sky Savings Rate (sUSDS)	0xa3931d71877C0E7a3148CB7Eb4463524FEc27fbD	SSR rate changes, sUSDS TVL
ySafe (Daddy)	0xFEB4acf3df3cDEA7399794D0869ef76A6EfAff52	Signer / threshold changes, submitted transactions
Accountant	0x5A74Cb32D36f2f517DB6f7b0A0591e09b22cDE69	Fee changes, config updates

Critical Events to Monitor

• PPS decrease — any decrease in convertToAssets(1e18) indicates a loss event. Should only increase
• Strategy additions / removals — StrategyChanged events (new strategies pass through 7-day timelock at the Strategy Manager)
• Debt allocation changes — UpdatedMaxDebtForStrategy and DebtUpdated events; especially material drift in the 80/20 sUSDS / Spark split or re-funding of the queued USDS Sky Rewards Compounder
• TVL inflow event — sustained TVL re-rise above 20M would justify reassessment, since current TVL reflects the post-redirection range
• Emergency actions — Shutdown event on vault
• ySafe / Brain / Security signer or threshold changes — governance integrity
• SSR rate changes — affects ~80% of vault TVL via the sUSDS Lender yield
• SPK reward rate changes — affects ~20% of vault TVL via Spark USDS Compounder yield
• Sky USDS Staking Rewards pause / migration — would impair ~20% of vault unwind capacity; monitor paused() state
• Sky Savings vault (pot/sUSDS) pause / migration — would impair ~80% of vault unwind capacity

Monitoring Functions

Function	Contract	Purpose	Frequency
convertToAssets(1e18)	Vault	PPS tracking	Every 6 hours
totalAssets()	Vault	Total TVL	Daily
totalDebt() / totalIdle()	Vault	Capital deployment ratio	Daily
strategies(address)	Vault	Per-strategy debt, last report time	Daily
get_default_queue()	Vault	Withdrawal queue composition	Weekly
getThreshold() / getOwners()	ySafe	Governance integrity	Weekly
getMinDelay()	ySafe	Delay change detection	Weekly
ssr()	Sky Pot	Savings rate	Weekly
rewardRate()	USDS Staking Rewards	SPK reward rate	Weekly

Reassessment Triggers

• Time-based: Reassess in 6 months (November 2026) or annually
• TVL-based: Reassess if TVL exceeds 50M USDS or changes by more than ±50% from the May 11 snapshot of 6.90M (would indicate either material upstream re-routing back into this vault or further contraction)
• Allocation drift:
  • if the funded mix collapses back toward a single venue (>90% in one strategy), Cat 2C dependencies should harden from 2.5 toward 3.0
  • if the queued USDS Sky Rewards Compounder is removed from the queue or shut down, Cat 2C should also harden (no on-chain fallback)
  • if Brain re-funds USDS Sky Rewards Compounder to add a third venue, Cat 2C should soften further
• Strategy changes (addStrategy() proposals at the Strategy Manager TimelockController, 0x88Ba032be87d5EF1fbE87336b7090767F367BF73, 7-day delay):
  • any new strategy proposed for inclusion — re-review during the 7-day timelock window
  • any new strategy with leverage, looping, cross-chain bridging, or non-blue-chip routing
  • re-introduction of either removed Aave V3 USDS strategy
• Vault-of-vaults composition: reassess if a new Yearn V3 vault begins routing into yvUSDS-1 (would re-establish terminal-layer concentration risk)
• Sky-specific:
  • SPK reward rate changes materially or the USDS Staking Rewards contract is paused / migrated
  • any change to the USDS contract (upgrade, governance vote)
• Incident-based: any V3 exploit, strategy loss, governance change, or Sky / MakerDAO incident
• Governance-based: ySafe / Brain / Security signer or threshold changes; any change to the timelock delay (would itself require 7 days)

---

Appendix: Contract Architecture

Snapshot at block 25073237 (May 11, 2026, 17:04 UTC).

┌──────────────────────────────────────────────────────────────────────┐
│                          VAULT LAYER                                  │
│                                                                       │
│  ┌────────────────────────────────────────┐                          │
│  │  yvUSDS-1 (v3.0.3)                    │                          │
│  │  ERC-4626, immutable Vyper proxy       │                          │
│  │  0x1828…47E8                           │                          │
│  │                                        │                          │
│  │  TVL: 6,903,076.23 USDS                │                          │
│  │   ├── 0 idle                           │                          │
│  │   ├── 5,524,421.92 → sUSDS Lender     │                          │
│  │   └── 1,378,654.31 → Spark Compounder │                          │
│  └─────────────────┬──────────────────────┘                          │
│                    │                                                  │
│       ┌────────────┴───────────┐                                      │
│       ▼                        ▼                                      │
│  ┌──────────────────────┐  ┌──────────────────────────────────────┐  │
│  │ sUSDS LENDER (80%)   │  │ SPARK USDS COMPOUNDER (20%)          │  │
│  │ 0x3F2d…CfC1          │  │ 0xc9f0…f8a3                          │  │
│  │   USDS → sUSDS       │  │   USDS → Sky USDS Staking Rewards    │  │
│  │   (Sky Savings vault │  │   → SPK → USDS                       │  │
│  │   ERC-4626 over pot) │  │   Atomic unstake on withdrawal       │  │
│  └──────────────────────┘  └──────────────────────────────────────┘  │
│                                                                       │
│  Queued, 0 debt at snapshot (on-chain fallback):                      │
│   • USDS Sky Rewards Compounder — 0x0868…5b81 (alternate Sky Staking) │
│                                                                       │
│  Removed from queue (Apr 27 → May 5; still absent at May 11):         │
│   • Aave V3 Lido USDS Lender — 0xC08d…3978                            │
│   • Aave V3 USDS Lender      — 0xD144…AaC61                           │
└──────────────────────────────────────────────────────────────────────┘
                                │
                                ▼
┌──────────────────────────────────────────────────────────────────────┐
│                          UNDERLYING                                   │
│  ┌──────────────────────────────────┐  ┌──────────────────────────┐  │
│  │ Sky Savings vault (sUSDS)        │  │ Sky USDS Staking Rewards │  │
│  │ 0xa393…fbD                       │  │ 0x173e…F3af              │  │
│  │ ~$5.38B TVL, SSR yield           │  │ Multi-billion USDS staked│  │
│  │                                  │  │ SPK reward (0xc200…b066) │  │
│  └──────────────────────────────────┘  └──────────────────────────┘  │
│                  $10M Immunefi bug bounty (Sky)                       │
└──────────────────────────────────────────────────────────────────────┘

Upstream composition (vault-of-vaults) at block 25073237:
  yvUSDC-1 → USDC to USDS Depositor       — 0 USDC debt (no longer routes here)
  yvDAI-1  → DAI to USDS Depositor        — ~2.56M DAI (~27.0% of yvDAI TVL)

Net effect: ~2.56M of upstream depositor flow currently lands here
(up from ~1.61M at the May 5 snapshot).

Appendix: TimelockController Role Structure

TimelockController 0x88Ba032be87d5EF1fbE87336b7090767F367BF73 — deployed at block 24,242,692 with admin = address(0). Same timelock used by 37+ Yearn V3 vaults including all six mainnet risk-1 vaults.

Timelock Roles

Role	Holder	Type	Notes
DEFAULT_ADMIN	No holder	—	Never granted (admin = address(0) at construction). No one can grant / revoke roles outside the propose → wait → execute flow
TIMELOCK_ADMIN	Timelock itself (0x88Ba032be87d5EF1fbE87336b7090767F367BF73)	Contract	Only the timelock can admin its own roles. Config changes (delay, role grants) must go through the 7-day delay
PROPOSER	Daddy/ySafe (0xFEB4acf3df3cDEA7399794D0869ef76A6EfAff52)	6-of-9 Safe	Sole proposer — no one else can initiate timelocked operations
EXECUTOR	Daddy/ySafe (0xFEB4acf3df3cDEA7399794D0869ef76A6EfAff52)	6-of-9 Safe	Direct execution
EXECUTOR	TimelockExecutor (0xf8f60bf9456a6e0141149db2dd6f02c60da5779b)	Contract	Wrapper — delegates to its internal executor list (Brain + deployer EOA)
CANCELLER	Daddy/ySafe (0xFEB4acf3df3cDEA7399794D0869ef76A6EfAff52)	6-of-9 Safe	Cancel pending proposals
CANCELLER	Brain (0x16388463d60FFE0661Cf7F1f31a7D658aC790ff7)	3-of-8 Safe	Cancel pending proposals

Why the 7-day delay cannot be bypassed

To shorten the delay, an attacker would need to (1) control Daddy 6/9 to propose updateDelay() — only Daddy can propose; (2) wait 7 days, during which Brain or Daddy can cancel; (3) execute via Daddy, Brain (via TimelockExecutor), or the deployer EOA — but the operation is already visible on-chain for 7 days. DEFAULT_ADMIN was never granted, so no one can self-grant PROPOSER or TIMELOCK_ADMIN to skip the flow.