The Aave community votes to reduce exposure to Curve Finance’s CRV token
The Aave community is currently voting on three proposals aimed at reducing the protocol’s exposure to Curve Finance’s CRV token. The proposals were put forward by Chaos Lab, an on-chain risk management platform, in response to increased volatility in Curve markets following a recent exploit. The first proposal seeks to reduce the liquidation threshold for CRV on Aave v2, while the second proposal disables borrowing of CRV tokens on Polygon v3 and Ethereum. Both proposals have received overwhelming support from the community. The third proposal, put forward by Aave Chan founder Marc Zeller, calls for the Aave treasury to purchase $2 million worth of CRV tokens from Curve Finance. This proposal has garnered less support but still has majority approval.
Background on the Curve Finance exploit and its impact on Aave
Curve Finance suffered a major exploit earlier this month, resulting in a significant price drop for its CRV token. This put Michael Egorov, the founder of Curve Finance, at risk of liquidation due to his large borrowing position on Aave. To mitigate this risk, the Aave community is taking steps to limit its exposure to CRV. However, Curve and Egorov have found support from prominent figures in the crypto space, such as DCF God, Jeffrey Huang, and Justin Sun, who have purchased CRV from Egorov to help stabilize the token’s value.
Hot Take
The Aave community’s decision to vote on these proposals showcases their commitment to risk management and protecting the protocol from potential vulnerabilities. By reducing exposure to CRV, Aave aims to safeguard its users and maintain the health of the DeFi ecosystem. The support shown by prominent players in the crypto industry indicates the importance of collaboration and solidarity in overcoming challenges within the space.
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