Aave: Liquidations Successful, But $1.6 Million Bad Debt Remains in Protocol

Lending protocol Aave tweeted that it was addressing the cycle of liquidations that occurred in the CRV pool on the Aave Protocol. The liquidations were successful (and worked as designed), but unfortunately, the size of the position left some excess debt within the protocol.

A large CRV borrow that had been building up for the last week was mostly cleared by the protocol liquidation process. However, the position was not covered entirely & 2.64M CRV (≈ $1.6M at current value) remains. This represents < 0.1% of the borrows on the protocol.

In the coming days, the Aave community and its contributors will initiate a discussion in response to this incident.

Previously, ponzishorter.eth borrowed a large amount of CRV from Aave to sell, causing a sharp fall in CRV price.