Collateralization under stress
Dolomite's assessment for RD-F-068 — scored yellow on the v1.7.0 rubric. The evidence below is the curator's reasoning for this score.
Evidence summary #
Global minimum collateralization 115-117.65% (LTV 85-86.96%) depending on chain. Under the WLFI stress scenario: $162M borrowed against WLFI collateral nominally worth $402-499M at April 2026 prices. WLFI-specific LTV set at 66%. WLFI price was ~$0.072 on 2026-05-07, down ~80% from 2025 highs, approaching (but not yet at) the 75% drop required to trigger liquidation. If liquidated at scale, WLFI's thin market depth (position size exceeds 4x Binance availability) would prevent orderly unwind, causing protocol net-collateralization to fall below 100% on the WLFI-exposed pool. No insurance fund of sufficient scale exists to backstop this. Partial $25M repayment reduced but did not eliminate the risk. Long-tail GM/PoL assets are secondary concerns at current TVL levels.
Sources #
- URLWLFI Defends Dolomite Loans Amid Liquidation FearsCryptoTimes: WLFI liquidation threshold ~75% price drop from April 2026 levels; WLFI already down 80% from 2025 highs; trading ~$0.072 on 2026-05-07retrieved 2026-05-16
- Chaos Labs WLFI Loop Risk AnalysisChaos Labs: WLFI collateral exceeds 4x Binance available liquidity; forced liquidation would crash price before unwinding, producing bad debtretrieved 2026-05-16
- Dolomite Risk Management - Collateralization ParametersGlobal LTV table: Arbitrum/Berachain 86.96% (115% min collateral); Ethereum 85% (117.65% min); WLFI-specific LTV 66% per market listingretrieved 2026-05-16
Methodology #
Determine whether under curator-defined stress scenario (top-3 collateral assets drop 50%), protocol net collateralization falls below 110%.
See the full factor methodology and distribution across all protocols →