Aave’s freeze on borrowing and lending assets comes as the DeFi protocol upgrades its software. camlearnscrypto reports
Decentralized finance protocol Aave is freezing borrowing and lending of assets in its Ethereum liquidity pool after a vote by its community of token holders aimed at mitigating risk – and in preparation for upgrading its protocol.
The Ethereum liquidity pool is the largest on Aave, which has $5.6 billion in liquidity locked across six chains on the protocol. It will sunset trading on 17 assets, including Curve , 1inch , Yearn Finance and several stablecoins., written by DeFi infrastructure company Gauntlet Network, is meant to avoid the risk of Aave accruing bad debt.
Nick Cannon, VP of Growth at Gauntlet, told CoinDesk the proposal was also prompted by insolvency issues with the Curve token. Aave held $1.5 million in bad debt after, shorting the coin and tanking its price. Cannot said that while these tokens returning online is up to the Aave community, they will likely return to the protocol operable on its v3 chain. He also noted that these tokens comprise about 5% of Aave's TVL.
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