The memo
REJECTED ON UNDISCLOSED ALLOCATION AND A LIQUIDITY-MISMATCH GAP, NOT ON AUDIT QUALITY. Grove is the Sky ecosystem's (formerly MakerDAO) institutional credit-allocation layer, deploying USDS liquidity into named strategies including a $1B allocation to the Janus Henderson Anemoy AAA CLO on Centrifuge. A retail depositor's actual exposure is the same sUSDS token used across the broader Sky ecosystem; the credit-strategy risk sits one step removed on Grove's own balance sheet. The protocol has genuine, verifiable audit coverage from ChainSecurity, Spearbit, and Certora across its controller, Basin, and governance-relay contracts, and Sky governance itself retains ultimate contract-admin authority — a real, disclosed control backstop. But Grove does not disclose what share of deposited capital sits in which named strategy beyond the flagship CLO allocation, and its own Basin liquidity facility explicitly disclaims that its "instant" settlement language changes the underlying illiquid credit product's actual redemption terms — meaning the headline liquidity promise and the underlying asset's real exit timeline are two different things, undisclosed in a way this review could not reconcile. The operating entity's legal jurisdiction is also undisclosed.
What would reopen the file
- Allocation percentages or dollar amounts by named strategy and counterparty are publicly disclosed
- The liquidity-mismatch question between Grove Basin's settlement framing and underlying illiquid credit-strategy redemption terms is resolved and documented
- The Grove Foundation's incorporation jurisdiction is publicly disclosed
- A consolidated third-party audit of the off-chain credit and RWA stack, not only the on-chain contracts, is published
Facts on file
- Verdict
- Rejected
- Exposure
- other
- Chains examined
- Ethereum, Base, Avalanche, Plume Mainnet
- Memo version
- v1
- Reviewed
- Next review