Ethereum

Blast

Cryptocurrency

random

Million

Pac Finance, a lending protocol on the Ethereum layer 2 solution Blast network and a fork of Aave, recently experienced significant liquidation. The platform suddenly lowered the liquidation threshold for user positions, which led to these unexpected liquidations.
Stani Kulechov, founder of Aave, drew attention to the issue on social media and said:
<blockquote>
 “A random Aave fork in Blast reduced the liquidation threshold (LT) instead of loan-to-value (LTV), resulting in $26 million worth of unnecessary liquidation.”
</blockquote>
The developer wallet unexpectedly lowered the liquidation threshold for Renzo restaked ether (ezETH) loans by changing a function in the PoolConfigurator-Proxy contract in Pac Finance. This change was made without prior notice or time lock and led to large-scale liquidations.
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Lowering the liquidation threshold on a credit platform could trigger an increase in liquidations due to the narrower margin of safety it provides for borrowers. Kulechov commented on the subject as follows:
<blockquote>
 “The main problem with forking code is the lack of in-depth knowledge of the software and parameters.”
</blockquote>
Crypto analyst 0xLoki noted that a single address (0x…db3d) carried out 93% of the liquidations, making a profit of approximately 244 ETH from the event.
Pac Finance acknowledged the issue and stated that it was in contact with affected users. The platform is “actively developing a plan with victims to address the issue.”
“Going forward, we will ensure discussions are pre-planned by creating a management agreement/timelock and forum for all future upgrades,” Pac Finance said. He made a statement.
*This is not investment advice.
 Continue Reading: <a href="https://en.bitcoinsistemi.com/developer-error-at-popular-cryptocurrency-platform-leads-to-liquidation-of-26-million-in-user-funds/" rel="noopener noreferrer nofollow">Developer Error at Popular Cryptocurrency Platform Leads to Liquidation of $26 Million in User Funds</a>

Developer Error at Popular Cryptocurrency Platform Leads to Liquidation of $26 Million in User Funds

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