Categories: Finance

Aave lending protocol freezes 17 tokens due to low liquidity

Aave lending protocol freezes 17 tokens due to low liquidity

The Aave protocol intends to secure itself by revalidating some crypto assets before a possible transition to a new version.

Board members of the decentralized lending protocol Aave held a vote, as a result of which it was decided to freeze some unstable tokens that have low liquidity. The list includes Curve Finance (CRV), 1inch (1INCH), Decentraland, Yearn Finance (YFI) xSUSHI, 0x (ZRX) and others. The protocol has also suspended several stablecoins: USDP, sUSD, GUSD, RAI, and LUSD.

While the assets are frozen, users will not be able to take out loans for these assets or contribute their assets to the protocol. This is reportedly being done to help Aave version 2 and the protocol’s eventual migration to version 3. The statement said that such a move was not approved by all members of the community. However, the authors of the proposal stated that the next step would be to re-verify the assets and list or delist the tokens from the platform, all depending on the liquidity and popularity of the asset.

The offer came immediately after an attempt to hack the protocol – a hacker named Avraham Eisenberg tried to borrow 40 million CRV tokens on Aave in order to simultaneously sell them on the market and reduce the price of CRV, causing liquidation of short positions in the token. However, the scam failed.

Previously, the decentralized autonomous organization Panda DAO reported that it might cease operations due to problems with the internal management of the project and lack of sufficient funding.

Source: Bits