Latest news about Bitcoin and all cryptocurrencies. Your daily crypto news habit.
The decentralized lending protocol AAVE has temporarily disabled its lending markets for multiple Ethereum-based tokens facing excess volatility and low liquidity.
The 17 frozen assets include various defi tokens that are competitors to AAVE, such as Compound (COMP) and Curve Finance (CRV).
- On Sunday, Aave passed a near-unanimous governance vote to disable the markets, with only two votes against, and over 500,000 in favor.
- In total, Aave’s frozen market list included the following: YFI, CRV, ZRX, MANA, 1inch, BAT, sUSD, ENJ, GUSD, AMPL, RAI, USDP, LUSD, xSUSHI, DPI, renFIL, and MKR.
- Among those, 5 are dollar-pegged stablecoins, including sUSD, Pax Dollar (USDP), Liquidity USD (LUSD), Gemini Dollar (GUSD) and RAI.
- The motion was proposed to mitigate risk “given that the market situation of these assets is currently volatile.”
- Earlier this month, Aave faced a $60 million short attack on its CRV pool using USDC as collateral.
- The attacker happened to be Avraham Eisenberg, the same person who exploited Mango Markets for $117 million in October, and who defended his actions as ethical in an uncensored interview.
- Eisenberg ultimately failed in this attempt and lost $10 million in the process. Nevertheless, the financial modeling platform Gauntlet called for freezing certain Aave markets in the aftermath as a precaution.
“The Aave ecosystem was built with a number of mechanisms that the Aave community can deploy to cover events like this, including the Safety Module, the Ecosystem Reserve & the DAO Treasury,” explained Aave in a Twitter thread last Tuesday.
- Aave added that the attack against the protocol provided a level of transparency that is rare within centralized entities in crypto. On Monday, BlockFi officially filed for bankruptcy after freezing withdrawals due to FTX exposure.
The post Aave Freezes Multiple Lending Markets Citing Volatility Concerns appeared first on CryptoPotato.
The views and opinions expressed in this article are solely those of the authors and do not reflect the views of Bitcoin Insider. Every investment and trading move involves risk - this is especially true for cryptocurrencies given their volatility. We strongly advise our readers to conduct their own research when making a decision.