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PROTOCOL RESEARCH

Felix risk

A licensed Liquity V2 CDP fork minting feUSD on HyperEVM, audited by Dedaub, Coinspect and Three Sigma with an immutable CDP core and no incident to date, but young, concentrated in HYPE collateral, dependent on Redstone oracles on a young chain, and now paired with a curated Morpho-based money market that widens the operator surface.
CautionResearched Jul 1, 2026

Scorecard

strong: Audits & contractsLicensed Liquity V2 fork; CDP contracts immutable per Terms; audited by Dedaub (Dec 2024) and Coinspect on Felix changes, plus Three Sigma price feeds (Jul 2025, 0 crit/0 high/2 med). Separate Morpho-based Vanilla product is a distinct code surface.
watch: Admin controlCDP is immutable but a Platform Operator multisig sets risk params and collateral onboarding; Vanilla adds a curator model (Anthias Labs). Exact signer count and timelock unconfirmed; Terms say operator cannot seize funds.
watch: OracleRedstone HYPE/USDC and LST feeds on a young chain; a Jul 2025 audit found and fixed a USDC-equals-1 pricing assumption (M01) and right-sized deviation thresholds (M02).
watch: Liquidity & exitfeUSD is redeemable for $1 of collateral and trades near peg ($0.9966 last check, ~$75M supply), but exit depends on HYPE-heavy collateral liquidity on one young chain.
watch: Yield (real vs emission)Stability-pool, CDP borrow, and Vanilla lending yield are real (interest plus liquidation gains), but a points program and HYPE-denominated returns add emission-like upside; verify live APR.
watch: Holder concentrationCDP collateral is ~70% WHYPE, so risk is concentrated in one asset; feUSD and any token holder distribution not confirmed this run.
watch: Track recordLive since April 2025, crossed $1B total deposits in Sep 2025, now ~$100M on DefiLlama; no exploit, depeg, or bad-debt event found, but only ~15 months of history on a brand-new chain.
🟢 strong🟡 watch / caveat🔴 weak / fund-loss risk
Verdict is a gate (worst flaw wins), not an average. Our read, not financial advice.

Live facts

auto-sourced now
TVL$75.8M
30d↑9%
Audits1
Last hacknone

DeFiLlama + our exploits feed. Cross-check the dated report against today.

TL;DR

Felix is a licensed Liquity V2 fork on HyperEVM (Hyperliquid's EVM) that mints feUSD, an overcollateralized CDP stablecoin, and also runs a second, larger product: Felix Vanilla, a Morpho Stack money market curated by Anthias Labs. The Liquity design is the strong part of the CDP: those core contracts are immutable, feUSD is redeemable for $1 of collateral, and stability pools absorb liquidations. The soft spots are newness and concentration. The protocol launched April 2025, the chain itself is barely older, collateral is dominated by HYPE, and pricing leans on Redstone oracles that a July 2025 audit caught making a USDC-equals-$1 assumption (since fixed). No Felix exploit, depeg, or bad-debt event found so far.

Checklist

Audits and contracts. Licensed Liquity V2 fork; the CDP smart contracts are immutable per the protocol Terms. Audited by Dedaub (report dated Dec 2024) and Coinspect on the Felix-specific changes (mint caps, admin parameter controls, emergency pause), plus a Three Sigma price-feed audit (July 23 to 25, 2025: 0 critical, 0 high, 2 medium, including the USDC-peg-assumption flaw, remediated). Recon and Cantina also appear in the audit set. A separate Felix Vanilla product runs on the Morpho Stack (not proxy-upgradeable, per Terms) and is a distinct code surface. Admin control. The CDP operates through immutable contracts, but core risk parameters and collateral settings sit behind a Platform Operator multisig, with Anthias Labs as advisor. The Terms state the operator cannot seize, redirect, or interfere with user funds. Exact signer threshold (N-of-M) and any timelock: refresh. Vanilla adds a curator model (Anthias Labs / Felix as Morpho curator over that market), a separate governance surface. Oracle. Redstone HYPE/USDC and LST feeds on a young chain. A real design flaw (building HYPE/USD from HYPE/USDC while assuming USDC is exactly $1) was found in the July 2025 Three Sigma audit and remediated (deviation thresholds also right-sized to 0.5%). Liquidity and exit. feUSD is redeemable for $1 of collateral at the protocol level and trades near peg ($0.9966 at last check, 24h range ~$0.989 to ~$1.002, ~$75M supply). Practical exit still depends on HYPE-heavy collateral and DEX liquidity on a single young chain. Yield: real vs emission. Borrow interest and stability-pool returns (interest plus liquidation gains) plus Vanilla lending yield are real cash flows. A points program and HYPE-denominated returns layer emission-like incentives on top. Confirm live APR before sizing. Holder concentration. Collateral is dominated by WHYPE (roughly 70% of CDP collateral), so the book is effectively a large concentrated bet on one asset. feUSD holder distribution and any Felix governance-token distribution: refresh. Track record. Live since April 2025 (reached ~$100M TVL within a week), scaled hard, crossed $1B in total deposits in September 2025 across CDP plus Vanilla, and has since come down to roughly $100M on the DefiLlama Hyperliquid-L1 measure. No Felix exploit, depeg, or bad-debt incident found. About 15 months of history, all of it on a new chain.

Worst case

A sharp HYPE drawdown is the dominant scenario: collateral is concentrated in HYPE and WHYPE, so a fast crash plus thin on-chain liquidity or an oracle hiccup on HyperEVM could push positions underwater faster than stability pools and liquidators can absorb, leaving bad debt against feUSD. A USDC depeg is a secondary path given the historical HYPE/USDC oracle dependency (the specific assumption was fixed, but USDC still sits under the pricing stack). The Vanilla money market adds a curator-model surface: a mispriced parameter or bad collateral onboarding decision by the operator or curator could impair that side. The immutable CDP core and the operator's stated inability to seize funds cap the governance-rug surface, but there is no insurance fund named here, so position sizing and monitoring the peg are your mitigation.

Bottom line

Caution. The engineering is sound for its class (immutable Liquity V2 CDP core, multiple audits, redeemable stablecoin, no incidents), and nothing here forces an avoid. What holds it back from solid is youth stacked on youth: a roughly 15-month-old protocol on a barely older chain, an oracle that already showed one real (remediated) flaw, collateral concentrated in HYPE, a multisig whose exact configuration is unconfirmed, and a curated Morpho money market that widens the operator/curator surface beyond the immutable CDP. Sizeable but appropriate for cautious, monitored exposure, not set-and-forget.

Data appendix

  • TVL: ~$99.8M current (DefiLlama api.llama.fi/protocol/felix, Hyperliquid L1 series). That series peaks at ~$458M (2025-09-19). Protocol-wide, Felix crossed $1B in total deposits in September 2025 counting both CDP and Vanilla (The Defiant, Sept 2025); the DefiLlama slug tracks a narrower figure. Source: DefiLlama, The Defiant.
  • Chain: Hyperliquid L1 / HyperEVM (single chain).
  • Products: (1) Licensed Liquity V2 fork CDP minting feUSD, per-collateral stability pools, redemptions at $1 of collateral, no liquidation penalty; (2) Felix Vanilla, a Morpho Stack variable-rate money market (deposit stables like USDe/USDT0/USDH, borrow against HYPE/kHYPE/UBTC), curated with Anthias Labs. Source: Three Sigma case study, Felix GitBook, hypurr.co, Morpho governance forum.
  • Collateral (CDP, DefiLlama token breakdown): WHYPE ~$71.4M (~70%), USDC ~$10.6M, USDT0 ~$8.6M, kHYPE ~$4.9M, feUBTC ~$1.7M, wstHYPE, USDe, others. Source: DefiLlama tokensInUsd.
  • Audits: Dedaub (report Dec 18, 2024) and Coinspect on Felix-specific changes; Recon and Cantina also in scope; Three Sigma price-feed audit July 23 to 25, 2025 (0 critical, 0 high, 2 medium; USDC-peg assumption M01 remediated, deviation thresholds M02 fixed). Immunefi bug bounty live, up to $100k. Source: Three Sigma, Felix GitBook audits page, Immunefi.
  • Oracle: Redstone (HYPE/USDC and LST feeds). Source: Three Sigma case study.
  • Admin / governance: CDP is immutable smart contracts governed by a Platform Operator multisig over risk params and collateral onboarding; Anthias Labs advises and curates the Vanilla market; Terms state the operator cannot seize/redirect user funds. Exact multisig N-of-M and any timelock: refresh. Source: Felix GitBook Terms, Morpho governance forum.
  • feUSD: ~$0.9966 last check, 24h range ~$0.989 to ~$1.002; market cap / supply ~$75M. Source: CoinGecko/CoinDesk, DefiLlama stablecoin page.
  • Holder concentration: feUSD holder distribution and any Felix governance-token distribution: refresh.
  • Incidents: None found for Felix (no exploit, depeg, or bad-debt event) as of this run. The upstream Liquity V2 stability-pool issue was a pre-launch design flaw Felix says it addressed before HyperEVM launch, not a Felix incident. Source: web search, impossible.finance, Immunefi.
  • Contracts: github.com/felixprotocol/felix-contracts. Maintained monthly. Methodology: DeFi Research Instruction v2.

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