Users blast curators Re7 and Silo for handling of DeFi turmoil

Three weeks ago, alarm bells began to ring over a “daisy chain of circular lending” between crypto yield-farming vaults.

Since then, the spectacular collapse of Stream Finance saw depegs, bad debt and millions of dollars trapped in low-liquidity markets.

The responses of some of the “curators” behind the vaults has left something to be desired, however. Curators are responsible for setting parameters on permissionless lending markets used to lever up user deposits.

Re7 Labs‘ ’extensive update proves a nothingburger

Re7 Labs has been relatively quiet over its vaults purported $27 million of exposure to the collapse.

The last post with any real detail came almost two weeks ago, before users were asked last Friday to “bear with us” and hold out for an “extensive update… in the first half of next week.”

Yesterday evening, the long-awaited update came. The post (replies disabled) states that Re7 Labs is “actively moving forward with… legal actions, and assessing the likelihood of recovery.”

However, its yet to receive any “satisfactory response” from counterparties Stream Finance or Stable Labs.

Users weren‘t impressed. One asked simply, “Is this a joke？” while another pointed to the post’s delay and lack of substance.

A third described Re7 Labs strategy as “Delay and Dilute” while “building a future liability-shielding narrative.”

A fourth users comment reads, “Handing over money for you to manage is truly eight lifetimes of bad luck.”

Silo users miss liquidity window

Silo Finance yesterday announced a $1.5 million repayment to the xUSD/USDC market on Arbitrum. The liquidity was snapped up within half an hour, with Silos post coming 28 minutes after the last significant withdrawal.

Users who were unable to withdraw were upset at having missed the window. To some, pro-rata socialized losses would be preferable to a first-come, first-served system in which lucky users are made whole, plus interest.

This is the dodgiest shit ever. If you knew a loan was going to be repaid, why not redistribute it to all depositors fairly, instead of allowing some to exit with their full 300%+ interest. The backroom deals between @VarlamoreCap @SiloFinance and privileged insiders is so…

— Suma (@sumatrone) November 20, 2025

They accuse Silo Finance of “backroom deals” with Varlamore, the manager of the vault in question. Varlamores website, as another user highlighted, states the firm “consists of builders from Silo and more.”

Other users chimed in. One called the move “shady af” and another said “this fake refund is just a publicity stunt.”

Multiple users claimed to have been banned from Silos Discord for pressing the matter.

Silo didnt directly address these concerns, instead announcing a further $645,000 of repayments in exactly the same manner.

Eulers compensation dilemma

A governance forum post to Euler Finance argues that, while “Euler bears no …, the reputational risk and user confidence impact are undeniable.”

Most comments support the idea, with the occasional warning against “any smash-and-grab treasury policy.”

One reply argues the request is “like asking Uniswap for compensation because a pool has been rug pulled” and that large EUL holders would vote down any such proposal.

A response from Euler Labs states the “protocol operated as designed throughout.” However, it encourages the governance process and “will not participate in the vote to avoid any conflicts of interest.”

Lidos Hasu argues compensating users sets a precedent whereby “curators and unworthy borrowers capture the upside, while downside risks are outsourced to Euler.”

More broadly, GFX Labs PaperImperium believes platforms such as Euler and Morpho should protect their reputation by “run[ning] as quickly as they can away from hosting their own branded front ends.”

It recommend “an arms length third-party front end,” comparing the situation to a menu being blamed for a bad meal.