Rho Markets

Lending

Rho Markets is a native lending protocol on the Scroll platform, facilitating liquidity through an overcollateralized model. It supports mainstream assets like ETH and BTC, as well as LRT assets including pufETH and ezETH, positioning itself as a central liquidity hub for various projects and solutions on Scroll.

Chain
TVL
＄27.38M
Native token
N/A
Protocol key links
Website Gitbook Twitter

Risk Rating

Low Risk

Assessment: 2024-9-01

Risk Assessment

Security History

Monitoring

Overall Score

68%

Alert

Assessor
Kop, Supergu
Assessment Date
2024-9-01

Underwriting interview done

Rho Markets, a native lending protocol on Scroll, focuses on secure and stable DeFi operations with a conservative collateralization approach and industry-standard oracles like Chainlink. Despite a significant $7.5 million loss due to oracle misconfiguration—later recovered—the platform demonstrated a strong commitment to enhancing their security by engaging our team for a comprehensive review. Initially rated at a grade D for security, Rho Markets significantly enhanced its protocols by introducing third-party monitoring system, strengthening internal controls, and plans to launch a bounty program and DAO for better community involvement.

Economic
Evaluate possible financial and economic risks depending on the project type (e.g., for lending, check the collateralization system), protection against CVEs (Common Vulnerabilities and exploits), oracle risks, and systemic concerns.

87%

Utilizes a conservative collateralization mechanism with LTV ratios between 50% and 70%.

Employs industry-standard price oracles such as Chainlink and API3.

Lacks a fallback oracle, although finding a reliable one is acknowledged as challenging.

Potentially exposed to systemic risk, as the majority of assets on the platform are based on ETH.

Operation
Look into the team's experience, track record, and project governance. Consider legal and counterparty risks that may impact the project.

65%

The core team is experienced, facilitating efficient protocol management and development.

Strong risk management, employing Hexegate monitoring to pause contracts during abnormal oracle price activities.

A major incident involving oracle misconfiguration led to a temporary loss of $7.5 million, though the funds were fully recovered.

Governance is currently centralized, with plans to evolve towards a DAO to enhance community involvement and decision-making.

Technical
Understand the security of the app, code quality, and controls in place. Check how well it was developed, tested, and reviewed by third parties.

51%

Comprehensive documentation on smart contracts, protocol mechanisms, and architecture aids user understanding.

Testing has been conducted with testnet and smart contract scripts, demonstrating the sense of internal control.

Relatively new project with limited battle-testing of smart contracts.

Smart contract test coverage is somewhat inadequate, which may lead to some bugs being overlooked.