Aave suspends support for 17 Ethereum-based tokens
The decision was made to protect against manipulation and the formation of bad debts
![Aave suspends support for 17 Ethereum-based tokens](https://storage.getblock.net/source/1/43y_XKWpjsa6oZCCNSKaPC66ZI7mPYqI.webp)
28.11.2022 - 13:00
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What’s new? Decentralized lending protocol Aave has announced that it would temporarily stop supporting 17 tokens and stablecoins based on the Ethereum blockchain in an attempt to protect itself from bad debt due to possible future market manipulation. A proposal was made by a member of the Aave community.
Which assets will be affected? The following projects on the Ethereum blockchain will be affected by the support suspension: yearn.finance, Curve DAO, 0x, Decentraland, 1inch, Basic Attention Token, Ampleforth, DeFi Pulse Index, renFIL and Maker, Enjin, xSUSHI, and sUSD, GUSD, RAI, USDP, and LUSD stablecoins.
The decision came after the protocol’s community approved the proposal to suspend support for assets deemed volatile due to low liquidity.
The proposal came days after trader Avraham Eisenberg opened a large short position on the Curve DAO (CRV) market. He borrowed $57 million worth of CRV on Aave and continued to sell tokens continuously, causing the price to plummet. However, due to a further rise in the value of CRV, the trader faced liquidation of the position, and Aave incurred $1,6 million in bad debt. The platform assured users that it has sufficient funds to repay the debt, but Aave wants to prevent such incidents by freezing pools of low-liquid assets.
2/6 A large CRV borrow that had been building up for the last week was mostly cleared by the protocol liquidation process. However, the position was not covered entirely & 2.64M CRV (≈ $1.6M at current value) remains. This represents < 0.1% of the borrows on the protocol.
— Aave (@AaveAave) November 22, 2022
In October, Eisenberg revealed his involvement in an exploit of the Mango Markets DeFi platform that resulted in it losing $114 million in cryptocurrency. The trader himself called it a “highly profitable trading strategy,” but agreed to return $67 million to the project in exchange for not being criminally prosecuted.
Eisenberg also later reported that he made $100 000 in half an hour from launching the Mango Inu meme token. At the time, he reiterated the legality of his actions, noting that he made no promises about the asset’s profitability and did not promote it.
Aave is a decentralized protocol for lending and borrowing cryptocurrencies. The founder is the programmer Stani Kulechov. The total value locked (TVL) in the protocol is $3,65 billion (DefiLlama’s data). As of November 28, 12:40 UTC, the native token AAVE ranks 51st in the rating of cryptocurrencies by market capitalization with a figure of $0,85 billion. The asset is trading at $59,8, having lost 5,08% in price in 24 hours, according to Binance.
In August, Aave DAO approved the launch of the decentralized stablecoin GHO pegged to the US dollar. An overcollateralized model is proposed for the GHO stablecoin. The collateral is a diversified set of assets to be chosen by the community.
On November 17, Binance suspended accepting deposits in USDC and USDT issued on Solana, and the OKX exchange delisted both assets. Tether later said it was transferring 1 billion USDT from the Solana network to Ethereum. One of Solana’s biggest investors was trading firm Alameda Research, part of the bankrupt FTX Group.
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