DeFi Lenders Seek to Minimize Contagion From Curve Founder's Debt After Hack

08/02 19:42

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Crypto lending platforms Aave, Fraxland, and Abracadabra are working to minimize the impact of the recent hack on decentralized finance exchange Curve Finance. The breach led to a decline in the value and liquidity of CRV tokens, which were used as collateral for loans taken out by Curve Finance founder Michael Egorov. Gauntlet, a crypto risk modeling firm, has proposed freezing the CRV lending market on Aave to mitigate risks. Meanwhile, Abracadabra is conducting a vote on whether to raise interest rates on Egorov's loans to force liquidation. However, if no action is taken, Egorov can repay over time. DeFi lending platforms operate without intermediaries and rely on over-collateralization basis. The transparency of these platforms makes positions vulnerable to attacks from other traders.

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