Protocol for decentralized liquidity Aave has temporarily shut down lending markets for 17 tokens in an effort to prevent volatility risks that might result in additional market manipulation attempts.
Following a vote by Aave governance members to temporarily freeze assets deemed to be volatile and low liquidity, the lending markets were shut down. Yearn Finance (YFI), Curve Finance (CRV), 0x (ZRX), Decentraland (MANA), 1inch (1INCH), Basic Attention Token (BAT), Enjin (ENJ), Ampleforth (AMPL), DeFi Pulse Index (DPI), RENFIL, Maker (MKR), and xSUSHI are among the assets on the list.
The protocol also halted the following stablecoins addition to these: sUSD, USDP, LUSD, GUSD, and RAI. Users that have their assets frozen are unable to deposit their funds into the protocol or take out loans against them.
The plan’s objective, according to the proposal, is to lessen the risk for Aave version 2 and encourage the eventual migration to version 3. The idea also highlighted the community’s current reduced risk tolerance. However, the proposal’s authors also made clear that the following step, which might involve delisting or relisting the markets, would depend on levels of utilization and liquidity.
The $60 million attempt to assault CRV using USD Coin (USDC) as collateral ended in failure, prompting the governance suggestion. Due to an incorrect estimation of the liquidity levels of the decentralized protocol, the assault was unsuccessful. However, project participants worked on a plan to stop additional efforts to attack the protocol.
A decentralized finance (DeFi) protocol was able to gather $10 million in contributions from numerous investors, including Bitfinex and Ava Labs, despite the volatility in the larger crypto market. Onomy, a Cosmos-based ecosystem, received funding last week to create a novel protocol that integrates DeFi and currency exchange.
