Aave

Blast

2024

Giant

<p class="is-style-lead">An Aave fork on Blast network liquidated user positions worth over $26 million due to an erroneous threshold change.</p> 
<p>Pac Finance, an iteration of decentralized finance (defi) lender Aave on Coinbase’s layer-2 chain Blast, attempted to adjust its loan-to-value (LTV) parameters on April 11. Instead, the Aave fork unknowingly reduced its liquidation threshold.</p> 
<p>The result was a sweeping wipeout of Ether-collateralized (<a href="https://crypto.news/price/ethereum/" target="_blank" rel="">ETH</a>) positions on the platform. According to&nbsp;<a href="https://x.com/wilburforce_/status/1778426380608307538" target="_blank" rel="">Will Sheehan,</a>&nbsp;Founder of block explorer Parsec, one user lost up to $24 million due to the Aave fork incident on Blast. On-chain analytics also showed participants thousands of dollars in losses denominated in ezETH.</p> 
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   <p lang="en" dir="ltr">Giant swath of ezETH Liquidations on pac finance last night on blast, someone got tagged for $24m <a href="https://t.co/uzqRX0UAUD" target="_blank" rel="">pic.twitter.com/uzqRX0UAUD</a></p>— Will Sheehan (@wilburforce_) <a href="https://twitter.com/wilburforce_/status/1778426380608307538?ref_src=twsrc%5Etfw" target="_blank" rel="">April 11, 2024</a>
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<h2 class="wp-block-heading" id="aave-fork-pac-finance-admits-error">Aave fork Pac Finance admits error</h2> 
<p>Hours after the issue was highlighted, Pac Finance <a href="https://twitter.com/pac_finance/status/1778529972447252497" target="_blank" rel="">acknowledged</a> the mistake and disclosed that affected users were contacted. The team also said a plan to mitigate the error was in the works.</p> 
<blockquote class="wp-block-quote"> 
 <p>“In our effort to adjust the LTV, we tasked a smart contract engineer to make the necessary changes. However, it was discovered that the liquidation threshold was altered unexpectedly without prior notification to our team, leading to the current issue.”</p> <cite>Pac Finance team</cite>
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<p>To avoid further mishaps, Aave promised to set up a community forum to discuss future upgrades and changes to its defi lending protocol. Pac Finance added that it intends to deploy a governance contract to reaffirm transparency and repair user trust.</p> 
<p> You might also like: <a href="https://crypto.news/aave-parent-company-rebrands-to-avara-adds-crypto-wallet-family-to-offerings/" rel=""> Aave parent company rebrands to Avara, adds crypto Family Wallet to offerings </a> </p> 
<p>Stani Kulechov, Founder of blockchain developer Avara and the parent company behind Aave’s project, <a href="https://twitter.com/StaniKulechov/status/1778693911763955870" target="_blank" rel="">tweeted</a> that the matter highlighted a root issue with protocol spin-offs.</p> 
<blockquote class="wp-block-quote"> 
 <p>A fundamental problem with forking code is the lack of in-depth knowledge of the software and the parameters.</p> <cite>Stani Kulechov, Avara Founder</cite>
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<p>The lending market is one of defi’s largest sectors, allowing users to borrow and provide liquidity to crypto’s burgeoning ecosystem. According to DefiLlama, lending protocols hold nearly $35 billion in total value locked (TVL).</p> 
<p><a href="https://crypto.news/price/aave/" target="_blank" rel="">Aave</a>&nbsp;is the most significant player in the market with $11.5 billion in TVL and availability across 12 chains, including Ethereum, Arbitrum, Polygon, Optimism, Avalanche, Gnosis, Base, Metis, Binance Smart Chain, Scroll, Fantom, and Harmony. It has also deployed its&nbsp;<a href="https://crypto.news/aaves-stablecoin-gho-hits-minting-limit/" target="_blank" rel="">stablecoin GHO</a>&nbsp;to compete with Maker’s DAI token on Ethereum’s blockchain.</p> 
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  <img loading="lazy" decoding="async" width="1024" height="651" src="https://crypto.news/app/uploads/2024/04/Screenshot-379-1024x651.png" alt="Aave fork"> 
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  Top five defi lender | Source: DefiLlama
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<p> Read more: <a href="https://crypto.news/aave-deploys-dai-stablecoin-competitor-on-ethereum/" rel=""> Aave deploys DAI stablecoin competitor on Ethereum </a> </p>

Aave fork on Blast mistakenly liquidated $26m

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