A Guide to VVS Finance - All Need to Know About the DeFi Protocol
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Aave governance supported the proposal to temporarily freeze lending markets comprising 5 stablecoins and 1 Ethereum-based token. Citing low liquidity and volatility, Aave considered freezing the assets would halt further attacks. 

Disclosure of Frozen Assets 

The vote conducted during the Aave governance forum to review the long-term asset risk harbored in the Version 2 (V2) market lends to the temporary freeze on Yearn Finance (YFi), Ox (ZRX), Basic Attention Token (BAT) and Curve Finance (CRV). 

Also, the freeze vote included 1inch (1INCH), Enjin (ENJ), Maker (MKR), Decentraland (MANA), RENFIL, xSuSHI, and DeFi Pulse Index (DPI) and Ampleforth (AMPL). 

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The DeFi lending protocol also froze several stablecoins, including USDP, GUSD, RAI, LUSD, and sUSD. The temporary freeze makes loans request on the listed assets inaccessible alongside the deposits to the protocol. 

Objective of Temporary Freezing Assets

Aave’s proposal to freeze assets aims to lower the risk confronted by Version 2. Besides, it aims to leverage the window to initiate planned migration to version 3. Announcing the proposal before the voting, Aave representative admitted the community members had lately portrayed lower risk tolerance. 

Furthermore, the initiators of the proposals indicated that future action would involve delisting or relisting the markets relative to the liquidity. Also, the proposal’s promoters expressed the need to assess the assets’ usage levels when determining their actions.  

The authors of the proposal considered the consequences of the failed $60-million attack targeting CRV by relying on USD coin (USDC) collateral. Fortunately, an erroneous calculation of the liquidity levels foiled the attack. The experience prompted action to field off exploit attempts targeting the Aave protocol. 

Active Interest in DeFi 

The governance forum was briefed that the decentralized finance protocol was navigating the current turbulence in the crypto market. The proposal authors acknowledged decentralized finance was gaining popularity. 

The promoters were optimistic of the segment future as demonstrated when a DeFi protocol raising $10 million from Ava Labs, CMS Holdings, and Bitfinex. Also, they acknowledged the success of Onomy – a Cosmos-based ecosystem- and raised the money during a private funding round towards developing a protocol harmonizing foreign exchange to DeFi. 

With the increased uptake of DeFi in mind, temporary suspension approved by the governance members will shield Aave from volatility risks that could prompt market manipulation attempts.  

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Michael Scott

By Michael Scott

Michael Scott is a skilled and seasoned news writer with a talent for crafting compelling stories. He is known for his attention to detail, clarity of expression, and ability to engage his readers with his writing.