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Tuesday, June 25, 2024

Aave V3 Markets Resume Operations Following Security Vulnerabilities

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Aave V3 markets have been unpaused by the Community Guardian, signaling the resolution of the issues that prompted the temporary measures. The move follows the execution of a governance proposal voted on earlier.

Additionally, Aave V2 Ethereum is anticipated to be unpaused tomorrow, a decision accelerated due to block times on voting and operational considerations.

Aave Resumes Operations

Decentralized lending protocol Aave has successfully resumed operations after implementing precautionary measures earlier this month in response to security vulnerabilities. In turn, the Aave DAO expressed gratitude for the prompt action taken by the Community Guardian in unpausing affected Aave V3 markets.

On November 4, Aave temporarily paused its V2 Ethereum market and suspended assets on Avalanche, Polygon, Arbitrum, and Optimism. Other Aave markets, such as Aave V3 on Ethereum, Base, and Metis, as well as Aave V2 on Polygon and Avalanche, remained unaffected.

The team temporarily halted the markets due to a reported problem with a specific feature. The pause was described as a precautionary measure following the identification of vulnerabilities.

Although the specific problem or feature causing the issue was not disclosed, Aave assured users that they could still withdraw and repay positions from the affected assets pool. However, no further supply or borrowing can occur from the frozen assets pool until the problem is resolved.

Aave submitted a governance proposal to restore normal protocol operation to address the situation – the proposal aimed to update stable borrow parameters for tokens with stable debt.

A voting process within the Aave DAO was scheduled between November 7 and November 10 to decide on the proposed measures. Notably, the governance proposal’s code has undergone testing by BGD Labs and reviewed by Aave Companies and smart contract security firm Certora.

AAVE Token Maintains Stability

Aave is a leading decentralized lending platform with over $6 billion in total value locked, according to data from DeFiLlama. In July 2023, the protocol introduced its algorithmic stablecoin, GHO, positioning it as a competitor to Maker’s DAI token.

The Aave DAO has expressed optimistic revenue expectations for the second half of 2023, fueled by a notable increase in the price of AAVE, the native token of the protocol.

Despite the security issues, Aave’s native token, AAVE, has demonstrated stability in its trend. Currently, the token is trading at $97.34, reflecting a 7.84% increase over the past week.

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