Season Recaps

Last updated 11 days ago

Season Recaps

During Season 1, the Risk Working Group made significant strides in enhancing the protocol’s risk management framework. The team focused on developing new methodologies, collaborating with other working groups, and implementing measures to ensure the safety and security of users’ funds. A comprehensive overview of the team’s strategic planning and execution was showcased through , highlighting 18 projects initiated and successfully completed during the season.

One of the key achievements was the development of frameworks such as the , the and the . These tools allowed the RWG to make data-driven recommendations for FiRM, improving the protocol’s ability to anticipate potential risks. The RWG also introduced the , a weekly deliverable providing a concise overview of key health indicators for Inverse Finance products. This proactive monitoring enabled the team to drive protocol adjustments based on evolving market conditions, ensuring ongoing robustness in risk management strategies.

The RWG worked diligently on upgrading its collateral onboarding process by enhancing risk assessments. A cadence was established to revise past assessments, utilizing the newly developed frameworks and monitoring tools to track the evolving risk profiles of collaterals integrated into FiRM. This allowed for a comprehensive understanding of the risk landscape and led to initiatives to fine-tune FiRM’s safety posture.

In terms of security measures, the RWG led initiatives to revamp the by migrating hosts from Hats Finance to ImmuneFi and by successfully petitioning the DAO to increase the bounty size. This move significantly increased engagement from security researchers, leading to more submissions and improved scrutiny of the protocol’s codebase. The RWG also engaged with several auditing firms, resulting in a comprehensive and security review of the sDOLA smart contracts by yAudit. The RWG also participated in cross-working group initiatives, shared ownership of SecOps and the Bug Bounty Program, and played a significant role in the head-of-multisigs responsibilities.

Throughout the season, the RWG effectively identified and assessed numerous risks, conducting for various collateral assets such as cvxFXS, CRV, cvxCRV, st-yCRV, INV, and wBTC. There were zero security incidents recorded, demonstrating the effectiveness of the implemented risk mitigation strategies and proactive measures. The RWG maintained timely responses to bug submissions through the ImmuneFi Bug Bounty Program, adhering to acceptable response times and ensuring swift action when necessary. Additionally, the team put forward during the season, all of which passed through governance with a 100% approval rate.

As Season 1 concluded, the RWG set its sights on building upon the solid foundation established. The team aims to enhance strategies, tools, and collaborations to address evolving challenges as Inverse Finance continues to grow its suite of products. The RWG remains committed to maintaining transparency and fostering education around risk management practices, with plans to continue the “Behind the Scenes” series to empower community members and contribute to the protocol’s safety and success. For a more detailed recap, head over to our forum post!

During Season 2, from May 1st to October 31st, 2024, the RWG built upon the strong foundation established in Season 1, focusing on enhancing existing risk management frameworks, conducting comprehensive risk assessments, and devising key projects to strengthen the protocol's security posture.

Throughout the season, the RWG modernized its risk management frameworks starting with redesigning the liquidity providers sheets to improve data accuracy and usability of the . Liquidation scenario modeling was refined in the Collateral Parameterization Model to include factors like gas costs in liquidation simulations and revising profit calculations methodologies. This modernization required collaboration among Risk and Analytics working groups and ultimately has led to better-informed recommendations for FiRM market settings.

The RWG conducted new risk assessments and proposed new markets on FiRM, including new LP collaterals , , and , as well as , , , , and . These assessments involved thorough analysis of the assets' risk profiles which include studies into the collateral liquidity, oracles, liquidations, and escrows, the contract ownership, upgradability, immutability, and audits, and the underlying protocol operational structure, transparency and centralization risks. Updated risk assessments for existing markets such as , and led to the unpausing of these markets after reassessing their safety. Building off of these assessments, the RWG prepared and advanced several proposals, facilitating market launches and adjustments, recommending parameter changes, and pausing and resuming markets when necessary. In all this, the remained a critical deliverable, providing a concise weekly and monthly overview of key health indicators for FiRM markets and other Inverse Finance products that helped drive policy.

SecOps initiatives were a significant focus during the season, with a "Four Lines of Defense" strategy being devised and pursued. The RWG maintained our channels with third-party auditors, and explored partnerships with security vendors like ZeroShadow and Forta to evaluate advanced threat detection and automated response solutions, aiming to integrate circuit breakers and real-time monitoring. The RWG enhanced the bug bounty program by increasing its size, successfully to add 40,000 DOLA to incentivize higher-quality submissions and engaging with ImmuneFi to improve effectiveness. Adopting ImmuneFi's is forthcoming, pending Inverse Finance entity formation. Challenges such as low-quality and spam submissions were addressed, and the program's scope was updated to make it easier for researchers to focus on relevant areas. The RWG also worked with the AWG to enhance alerts and monitoring tools through Inverse Watch, setting up oracle variance alerts and focusing on critical signals.

A was launched to incentivize liquidators, ensuring they are adequately rewarded and active within the ecosystem, which is crucial for market health. We are still actively seeking to establish communication with MEV actors to understand their influence and onboard them to our ecosystem. Other R&D projects included performing due diligence on StakeDAO's OnlyBoost for FiRM integration, exploring new framework development in studying gauge health based on protocol ownership, bribe mechanisms, and historical data, and more.

With a strong focus on continuous improvement, the RWG remains dedicated to proactively identifying and mitigating risks, fostering collaboration across working groups, and ensuring the safety and stability of Inverse Finance as it continues to expand its suite of products. The team's efforts during Season 2 have solidified the foundation for future growth and innovation. For a more detailed recap, head over to our "" forum post!

During Season 3, from November 1, 2024, to April 30, 2025, the RWG strengthened core processes, expanded framework automation, and demonstrated the resilience of Inverse Finance's risk infrastructure through real-world adversarial tests.

Framework modernization was a key focus area, with the master sheet introduced as a centralized source of truth for contract metadata, dependencies, governance control, and audit tracking. This framework, alongside the evolution of the , laid the foundation for dynamic, automation-ready infrastructure that will support the DAO’s ongoing monitoring and governance needs. Initial efforts toward automating frameworks via Google Apps Script retained flexibility while improving real-time responsiveness.

The RWG conducted over a dozen new and updated risk assessments, covering new collateral types including , , , , , and LPs, as well as a deep dive in , key product launches such as the and market. Critical maintenance of price feed infrastructure was also undertaken, including the successful to a modular ChainlinkBridgeAssetFeed model, improving oracle security and standardization.

Security operations advanced significantly under the RWG’s “” model. The was formally adopted, providing legal protections for whitehats intervening during active exploits. The was expanded with a 100,000 DOLA ceiling increase, and the RWG actively triaged submissions and coordinated payouts to whitehats. The was successfully launched, onboarding proficient MEV actors to ensure stronger liquidation coverage across FiRM markets during periods of market stress.

Throughout Season 3, the RWG also played an active role in DAO governance, drafting and guiding over 36 proposals to execution, including the launch and expansion of multiple FiRM markets, improvements to borrowing parameters, and upgrades to core infrastructure like the and . Meanwhile, public-facing transparency initiatives continued through the publication of three "" installments, helping to explain key upgrades and risk methodologies to the wider community.

Season 3 also tested RWG’s incident response and real-time monitoring capabilities. Amid multiple flash crashes and broader market contractions totaling a 37% decline in total crypto market cap, the RWG maintained proactive market surveillance, orchestrated market pauses where appropriate, and coordinated real-time interventions — including critical fixes to PT and wBTC markets. These responses contributed directly to the protocol’s ongoing record of avoiding new bad debt accumulation.

With Season 3 concluded, the RWG has demonstrated the strength and adaptability of Inverse Finance’s risk management frameworks under pressure, while continuing to invest in the systems, processes, and governance improvements needed for future resilience. The team remains committed to continuous improvement, maintaining transparency, and upholding the highest standards of risk oversight as Inverse Finance grows. For a more detailed recap, head over to our "" forum post!

PreviousAuthored Posts

Last updated 11 days ago