While Morpho and YO introduce safeguards for the Earnings and Smart Earnings accounts on Moneda, potential risks include:
- Losses due to smart contract vulnerabilities or exploits.
- Stablecoins de-pegging from their corresponding fiat currency.
- Temporary unavailability of funds during extreme liquidity shortages.
- Extreme Market events where liquidated collateral is insufficient and the Reserve Factor is exhausted.
→ These risks are low for stablecoin lending but still exist.