The popular DeFi platform Aave temporarily halts lending markets for 17 Ethereum-based tokens comprising 5 stablecoins as the market situation of these assets is currently volatile.
Llama and Chaos Labs issued a proposal to pause these tokens as an extra precaution, and the community approved with 100% votes in favor.
It is against the rules of the Aave protocol for users to make deposits of these assets or take out loans using them. This is done for risk management purposes.
yearn.finance, Curve DAO, 0x, Decentraland, 1inch, Basic Attention Token, Ampleforth, DeFi Pulse Index, renFIL, and Maker, Enjin, and xSUSHI are the concerned loan markets, and the five stablecoins are sUSD, GUSD, RAI, USDP, and LUSD. The DeFi Pulse Index is the concerned index.
This turn of events occurred as a result of a recent transaction in which a trader borrowed a total of 92 million CRV from Aave and used 58 million USDC as security for the loan. During the incident, CRV’s value was impacted in some way.
Due to the extent of the short position, some extra debt was left inside the procedure, and Aave was left with a CRV of & 2.64 million and an outstanding debt of around $1.6 million.
By tweeting, “Most significantly, today’s events are in contrast to those we have seen with centralized corporations in the sector — the transactions were totally traceable and auditable on-chain, offering transparency for users and the community,” the protocol did poke fun at centralized companies.
Compiled by Coinbold