Aave Freezes Markets With Low Liquidity Citing Volatility Fears

🚀 Stay Ahead with AltcoinDaily.co! 🌐

Due to high volatility and poor liquidity, the decentralized lending protocol AAVE has temporarily shut down its lending markets for several Ethereum-based currencies. A motion to reduce risk is put forward “given that the market position of these assets is currently volatile.” 

Several competing defi tokens to AAVE, like Compound (COMP) and Curve Finance (CUR), are among the 17 assets that have been suspended (CRV).

Aave’s governance committee held a vote on Sunday to disable the markets, and while there were two people who voted against the measure, nearly half a million people supported it.

  🌟 Unlock Crypto Insights with AltcoinDaily.co! 💰

In total, the markets which were featured on Aave’s list of frozen commodities are YFI, CRV, ZRX, MANA, 1inch, BAT, sUSD, ENJ, GUSD, AMPL, RAI, USDP, LUSD, xSUSHI, DPI, renFIL, and MKR. Five of them are dollar-pegged stablecoins, such as sUSD, Pax Dollar (USDP), Liquidity USD (LUSD), Gemini Dollar (GUSD), and RAI.

Aave Lost $60M Earlier This Month

Notably, Aave had a short attack on their CRV pool with USDC as collateral earlier this month, costing the company $60 million. The attacker, Avraham Eisenberg, was the same man who in October scammed Mango Markets and then justified his behavior as ethical in an unrestricted interview.

Additionally, Eisenberg lost a total of $10 million because of this failure. Nevertheless, the financial modelling platform Gauntlet suggested freezing certain Aave markets in the aftermath as a safeguard.

 🦂 AltcoinDaily.co is your trusted source for the latest in crypto news and insights. 🚀

Last Tuesday, Aave clarified in a Twitter thread:

“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.”

After the demise of FTX, the crypto market has seen a great downfall, comapanie like Genesis, Blockfi have suffered a lot. On Monday, BlockFi formally filed for bankruptcy after freezing withdrawals owing to FTX exposure.

 🔍 Your Crypto News Hub: AltcoinDaily.co! 🌐