Aave Community Rejects Proposal to Freeze CRV Tokens


The Aave community voted unanimously against the Gauntlet team’s proposal to lock the credit collateral in Curve DAO (CRV) tokens in the second version of the protocol.

Previously, the DeFi risk management project proposed to freeze CRV and reduce the loan-to-asset ratio to zero.

Gauntlet’s attention was drawn to a loan of ~$67.7 million in stablecoins secured by CRV. Analytical services mark this user’s wallet as linked to Curve Finance founder Michael Egorov.

On June 10, the address deposited an additional 38 million tokens on Aave V2. Collateral volume reached 290 mln CRV (~$185 mln) or about 34% of the asset’s market supply.

Experts argued that the freezing of funds may encourage Yegorov to reduce the loan amount or diversify the collateral in order to “protect Aave from accumulating bad debts as a result of the potential decrease in the liquidity of CRV tokens.”

In addition, the coin lock made it easier to transfer credit to version 3 of Aave.

According to DeBank, the “health factor” of Yegorov’s position is 1.69 at the time of writing. This indicates the absence of possible risks – liquidation occurs at a value of 1.

Recall that in May, Aave launched the “temperature check” procedure for the proposal to integrate Coinbase’s second-tier Base solution.

In April, the Aave community supported the deployment of the protocol on the zkSync Era network.

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