st-ycrv liquidation

Yearn's ajna committee was forced to liquidate a position to avoid bad debt. The strategy and yearn treasury made it out with a small profit.

State On May 1st

  • yvAjnaDAI had two strategies lending DAI to st-ycrv

    • Capital at risk: 399k DAI + 300k DAI

  • Both strategies were lending at 0.34051 per st-ycrv and market value was 0.6787

    • Based on market price, lending at a ~50% LTV

    • Originally, lending started at 20% LTV

  • Pool borrowing was at 29.25% increasing 10% every 12hs

  • Two of the biggest borrowers 0x0059efca9d24bf579ee0314e7bc2569674aa42e2, 0x286ee152779ca230a30337d3f96df7963e41a307 levered up.

  • There was 667k CRV in the curve ycrv/crv pool

  • Lowest health rate borrower had 861_239.55 st-ycrv as collateral and 258_117.99 DAI debt

  • Bond to kick borrower 2_565.99 DAI


If liquidation happens it might

  • Wipe the ycrv/crv pool

  • It would sell around 1.3M CRV for DAI

  • It might tank the price of ycrv, causing other positions to go under

  • No market participation in the liquidation auction

  • No mev bots participating in the auction because of no direct pool liquidity for st-ycrv

Options Explored Without Success

  • Tried contacting the borrower

  • Kept increasing the borrowing rate to force repayment

  • Simulated how long it would take for the user position to go below 1 on health ratio. It would have happened on GMT: Thursday, May 30, 2024 3:09:49 PM.

Decision Made

On May 2nd, we started a war room to liquidate the position.

  • Treasury allocated 500k DAI to baseline the auction

  • Treasury would participate in the auction with 100k collateral chunks and will start bidding when auction reaches below market price

  • st-ycrv strategy reward trading was halted to allow OTC with treasury

  • Bond price would be paid by vault liquidity


LenderKick Action

You can see in this transaction how capital was added to the strategy to pay for the lenderKick bond:

Another Borrower Repaid Their Debt

After the liquidation started, another borrower repaid their loan:


Take is the process of taking collateral and giving the pool quote token. In this case is taking st-ycrv and sending DAI.

Take #1: Not yearn

Take #2: Yearn took 2nd

Take #3: Not yearn

Take #4: Yearn took 4th

Take #5: Not yearn

Take #6: Yearn took 6th

Take #7: Not Yearn

Take #8: Yearn took 8th

Strategy Withdraw

Strategy withdrew all funds and reported a 2_781.66 profit. This number is, profit from the interest generated minus the bond price.

st-ycrv OTC with treasury

You can check the sender address for more details but important part is:

Keeper harvested seconds afterwards in


Liquidated party ended up with 348k st-ycrv.

Yearn strategy withdrew from the ajna pool with profit.

Yearn treasury ended up using 141_086.76 DAI from the 500k allocated.

275_627.5 st-ycrv were bought and OTC with the st-ycrv strategy.

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