Aave DAO Begins Voting On CRV Exposure
The Aave community is voting on three proposals to reduce the protocol’s reliance on Curve Finance’s CRV token. Two of the proposals were voted on August 10th. Chaos Lab, an on-chain risk management tool, proposed the recommendations, as volatility in Curve markets increased following the recent exploit. The action aims to mitigate the risk posed by Michael Egorov, the founder of Curve Finance.
The voting on proposals for Aave v2 and CRV tokens has reached 571,000 votes, with 100% of the votes in favor of limiting exposure. The first proposal aims to reduce the liquidation threshold by 6% for CRV on Aave v2, potentially causing user accounts to be liquidated upon approval. The second proposal disables borrowing of CRV tokens on Polygon v3 and Ethereum, making it impossible to short CRV through the Aave protocol. Aave’s community is also voting on a third proposal, proposed by Aave Chan founder Marc Zeller, which calls for the Aave treasury to purchase $2 million worth of CRV tokens from Curve Finance. Zeller believes this would signal support from major DeFi players and the overall DeFi ecosystem. Currently, around 62% of votes support the proposal, while 37% have voted against it.
(With inputs from Shikha Singh)
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