A bug in the Aave V2 Decentralized Finance (DeFi) lending protocol on the Polygon network has made it impossible for users to interact with assets worth about $110 million on the platform.
Blockchain security firm BlockSec reported on May 19 that the problem was due to the ReserveInterestRateStrategy contract being deployed on Polygon. The upgrade was intended to enable a more efficient interest rate curve on Aave V2 and optimize the use of the platform.
However, due to its incompatibility with the network, Aave users cannot interact with their assets on the protocol. This means that users cannot borrow, withdraw, repay or provide more of these assets to the protocol as each call returns.
Funds Stay Safe
Developers have admitted the problem noting that only Aave V2 affected Polygon. The V2 on Ethereum and Avalanche are working perfectly, and so is the V3 protocol.
The developers also assured users that their funds, including the assets involved, were safe.
Although the problem is not a safety issue, users cannot fully interact with the assets until the problem is resolved. The only way this can be achieved is through governance.
Aave is Working on a Solution
A new governance proposal has been submitted submitted to settle the matter — the Aave DAO will begin voting on the proposal later today.
“Taking into account governance times, if approved, the settlement will be implemented in about 7 days from now: 1 day delay to start voting, 3 voting days, 1 day lock time on Ethereum, and 2 additional days lock time on Polygán,” reads part of the proposal.
This event shows how complex DeFi can be, and its specificity at various Ethereum Virtual Machine-compatible (EVM) chains.
Aave is one of the most prominent DeFi protocols due to its many users. The total value of assets locked up (TVL) on the crypto lending protocol sits at $5.18 billion, according to Dephyllama. Aave V2 accounts for most of this TVL at $3.72 billion.
Meanwhile, the news had little impact on AAVE’s price performance. The token is up 0.1% in the past 24 hours, trading for $64.85 as of press time, according to Topcripto data.
Adhering to Trust Project guidelines, Topcripto is committed to unbiased, transparent reporting. This news article aims to provide accurate and timely information. However, readers are advised to independently verify facts and consult a professional before making any decisions based on this material.
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