CoinEdition in Binance Feed: To prevent attacks, Aave shuts down pools with low liquidity

• Aave has frozen 17 v2 pools due to their low liquidity and volatility.

• An attack cost the Aave protocol $1.6 million in bad debt last week.

• AAVE’s price is down nearly 30% over the past month.

Earlier last week, Aave’s governance forum received a proposal calling for the freezing of 17 v2 pools as a precautionary measure given their low liquidity and the volatility of the underlying assets. The proposal received almost unqualified support.

The YFI, CRV, ZRX, MANA, 1INCH, BAT, sUSD, ENJ, GUSD, AMPL, RAI, USDP, LUSD, xSUSHI, DPI, renFIL and MKR -Pools from Aave v2 have been paused. https://t.co/wfo70JSpMI

— Wu Blockchain (@WuBlockchain) November 28, 2022

YFI, CRV, ZRX, MANA, 1INCH, BAT, sUSD, ENJ, GUSD, AMPL, RAI, USDP, LUSD, xSUSHI, DPI, RENFIL and MKR stopped Aave V2 trading pools.

Avraham Eisenberg, the trader responsible for the recent $116 million Mango Markets exploit in October, shared a possible strategy for well-funded companies to profit from the REN market on Avenue V2.

Eisenberg attempted to duplicate his “profitable trading approach” on Nov. 22 by borrowing millions of CRV from Aave’s illiquid pool to short the token.

After Curve published the white paper for its upcoming stablecoin, CRV’s price rose rapidly, making it appear that Eisenberg’s trades had failed as it suffered losses in the seven-figure range. But the attack cost the AAVE protocol $1.6 million in bad debt.

Aave shut down these pools to protect against attacks as they targeted Aave’s CRV pool. While Aave claimed to have the resources to make up for the loss, protocol is committed to preventing the situation from repeating itself.

The proposal to freeze 17 v2 pools was in response to concerns about their liquidity and volatility.

However, the AAVE Governance Forum felt it was imperative to take this precaution to protect the protocol from possible attacks. As a result, AAVE’s price has fallen nearly 30% over the past month.

The post “To Prevent Attacks, Aave Decommissions Low Liquidity Pools” appeared first on Coin Edition.

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