Crypto Loan AAVE FROZEN 17 Tokens, This Is The Reason!

Aave frozen dozens of assets due to low liquidity. (Photo; Doc. Coinmotion)

JAKARTA One leading decentralized financial platform (DeFi), Aave, which is a decentralized crypto lending protocol, has reportedly frozen 17 crypto tokens. This freeze-out is intended to protect itself from uncharged receivables (bad debt) and the possibility of market manipulation attacks.

Aave is the largest crypto loan platform on the Ethereum network. Aave has $3.65 billion in assets locked in a number of networks. The company's move to suspend a loan of a number of crypto assets to Aave version 2.0 has been approved by governance members through its Ladenet Networks proposal.

Proposals contain requests to temporarily suspend a number of assets deemed unstable'' due to low liquidity on the platform. A number of frozen lending platforms include yearn.finance, Curve DAO, 0x, Decentraland, 1inch, Basic Attention Token, Ample airing, DeFi Pulse Index, renFIL and Maker, Enjin, xSUSHI and five stablecoins: sUSD, GUSD, RAI, USDP, and LUSD.

Due to the lack of liquidity profile, Aave decided not to allow users to deposit these assets or take loans on the platform to avoid unexpected risks.

In response to recent market events and continued liquidity contractions across markets, the proposal seeks to reduce risk profiles in many higher volatile assets, the proposal said.

Members of governance officially approved a Laundlet proposal after finding a trader opening a large-scale short position on the Curve DAO (CRV) market in Aave which generated $1.6 million for the protocol. For information only, the term uncharged receivables or bad debt is debt that cannot be repaid or deleted.

TheBlock also reported last week that a trader had borrowed 92 million CRV (about 57 million US dollars) in Aave and continued to sell tokens continuously, causing a sharp drop in CRV token prices. Trader, under pressure as the price of CRV tokens strengthens. When liquidated short positions, Aave obtained a bad debt of 1.6 million US dollars.

Therefore, Aave as DeFi's platform intends to avoid and prevent these problems by temporarily stopping the asset market which has low liquidity and is affected by excessive volatility. The following is a list of 17 assets suspended on the Aave crypto loan platform: