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Aave stops lending 17 coins on the Ethereum network

Aave, the largest lender for Ethereum, is feeling the liquidity crunch.

By Finst News
• 3 min read
Aave stops lending 17 coins on the Ethereum network

Aave, the largest lender for Ethereum, is feeling the liquidity crunch. Seventeen tokens have been affected.

Aave is freezing loans for 17 Ethereum coins. It’s the largest lending protocol on Ethereum, with more than $3.65 billion in assets across multiple chains. "In response to recent market events and the ongoing liquidity shortfall in markets, this proposal will reduce the risk profile of many volatile assets," Aave said in a statement.

A default prompted the decision

The move followed a $1.6 million default. A trader led to this with a massive short position of over US$92 million on CRV. The frozen coins are: Curve DAO, 0x, Decentraland, 1inch, Basic Attention Token, Ampleforth, DeFi Pulse Index, renFIL and Maker, Enjin, xSUSHI and five smaller stablecoins.

Widespread liquidity problems

This year, more lending services and crypto exchanges have liquidity problems, partly due to the Terra Luna crash and the collapse of FTX, the second-largest crypto exchange in the world.

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