Blockchain security firm BlockSec reported on May 19 that the problem was due to the ReserveInterestRateStrategy contract deployed on Polygon. The upgrade was intended to enable a more efficient interest rate curve on Aave V2 and optimize the platform’s utilization.
However, due to its incompatibility with the network, Aave users cannot interact with their assets on the protocol. This means users can’t borrow, withdraw, repay, or supply more of these assets to the protocol as every call reverts.
Funds Remain Safe
The developers also assured users that their funds, including the affected assets, were safe.
While the problem is not a safety issue, users cannot fully interact with the assets until the problem is fixed. The only way this can be achieved is through governance.
Aave is Working on Solution
“Considering governance times, if approved, the fix will be applied in approximately 7 days from now: 1 day of delay to start voting, 3 days of voting, 1 day of timelock on Ethereum, and 2 extra days of timelock on Polygon,” part of the proposal reads.
This incident further highlights how complex DeFi can be, with different Ethereum Virtual Machine-compatible (EVM) chains having their peculiarities.
Aave is among the most prominent DeFi protocols due to its many users. The total value of assets locked (TVL) on the crypto lending protocol sits at $5.18 billion, according to Defillama. Aave V2 accounts for most of this TVL with $3.72 billion.
Meanwhile, the news has had minimal impact on AAVE’s price performance. The token is up 0.1% in the last 24 hours, trading for $64.85 as of press time, according to BeInCrypto data.
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