Considering the turmoil in the crypto market, DeFi protocols Aave and Compound; took some security measures to protect from price manipulation and attacks.
Reasons for Stopping
They want to take precautions on both platforms to manage the risks that occur after the latest events in the crypto market. Firstly, Aave decided to stop the use of 17 tokens in credit transactions, including Aave, Yearn.finance (YFI), Curve Dao (CRV), Gemini Dollar (GUSD), Maker (MKR), and 1inch (1inch). Aave founder and CEO Stani Kulechov said:
“DeFi protocols are being battle tested and it highlights how communities can implement new parameters to enhance risk mitigation factors in volatile market environments that are moving fast. It’s been fascinating to watch the DeFi community discuss, propose, vote and implement new parameters—with incredible transparency—to adapt and safeguard the protocol. This is what DeFi is all about.”
Both platforms experienced large declines compared to last month. In October, in addition to Aave, Compound also went for a borrowing limit and credit limit solution to minimize the risk on its platform. Together with Aave and Compound, it constitutes 5.4 billion dollars of the total value locked in the DeFi ecosystem. It seems inevitable that the two major DeFi platforms hosting such large amounts will take these measures during this troubled period experienced by the crypto world.
About Aave
Aave is a DeFi project founded by Stani Kulechov in 2017, where you can perform loan and lending transactions by offering decentralized, brokerless and fixed interest rates to its users. The company operates on the Ethereum blockchain and enables borrowing and lending transactions in all ERC-20-based cryptocurrencies.
About The Compound
Compound is a DeFi protocol founded by Robert Leshner and Geoffrey Hayes in 2017 that allows users to earn on interest. Compound is built on the Ethereum blockchain. The protocol is managed by the community. Users can perform lending, borrowing and access to smart contracts on the platform.
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