Share this article
Aave Supporters Say Lending Freeze Will Help Transition the Network
Community members voted Monday to freeze 17 assets in the Ethereum liquidity pool to lower risk within the DeFi protocol ahead of upgrading the network to its third version.
By Cam Thompson
Updated May 9, 2023, 4:03 a.m. Published Nov 28, 2022, 11:19 p.m.
Make us preferred on Google
Decentralized finance (DeFi) protocol Aave is freezing borrowing and lending of assets in its Ethereum liquidity pool after a vote by its community of token holders aimed at mitigating risk – and in preparation for upgrading its protocol.
The Ethereum liquidity pool is the largest on Aave, which has $5.6 billion in liquidity locked across six chains on the protocol. It will sunset trading on 17 assets, including curve (CRV), , yearn finance (YFI) and several stablecoins.
STORY CONTINUES BELOW
Don't miss another story.Subscribe to the Crypto Daybook Americas Newsletter today. See all newsletters
The proposal, written by decentralized finance (DeFi) infrastructure company Gauntlet Network, is meant to avoid the risk of Aave accruing bad debt. It will help the protocol move from its version (v)2 to v3 version by giving users the option to migrate their assets to the upgraded network, according to the company.
Nick Cannon, vice president of growth at Gauntlet, told CoinDesk the proposal was also prompted by insolvency issues with the curve token. Aave held $1.5 million in bad debt after a trader borrowed 20 million CRV from Aave to crypto exchange OKX, shorting the coin and tanking its price.
Cannon said that while returning these tokens online is up to the Aave community, they will likely return to the protocol operable on its v3 chain. He also noted that these tokens comprise about 5% of Aave's total value locked (TVL).
Additionally, two separate additional proposals to pause borrowing on Uniswap and Chainlink passed on Sunday. Cannon noted that these tokens, a part of the Ethereum liquidity pool, were added to ensure the “robust tokens” were included in their effort to keep the assets safe.
The protocol has been slow and steady in its move to deploy more assets on its v3 network over the past year. In January, Aave founder Stani Kulechov said the protocol would begin to deploy its v3 upgrade across seven chains, including Ethereum.
On Monday, the Aave community voted in an off-chain poll to allow users to migrate 26 assets in the Ethereum liquidity pool to the v3 network.
Currently, the upgraded versions of Aave runs atop layer 1 blockchain networks Avalanche, Fantom, and Harmony, as well as Ethereum-based layer 2 networks Arbitrum, Polygon and Optimism.
More For You
KuCoin captured a record share of centralised exchange volume in 2025, with more than $1.25tn traded as its volumes grew faster than the wider crypto market.
What to know:
- KuCoin recorded over $1.25 trillion in total trading volume in 2025, equivalent to an average of roughly $114 billion per month, marking its strongest year on record.
- This performance translated into an all-time high share of centralised exchange volume, as KuCoin’s activity expanded faster than aggregate CEX volumes, which slowed during periods of lower market volatility.
- Spot and derivatives volumes were evenly split, each exceeding $500 billion for the year, signalling broad-based usage rather than reliance on a single product line.
- Altcoins accounted for the majority of trading activity, reinforcing KuCoin’s role as a primary liquidity venue beyond BTC and ETH at a time when majors saw more muted turnover.
- Even as overall crypto volumes softened mid-year, KuCoin maintained elevated baseline activity, indicating structurally higher user engagement rather than short-lived volume spikes.
More For You
How the ultra-wealthy are using bitcoin to fund their yacht upgrades and Cannes trips
Cometh founder Jerome de Tychey is applying DeFi lending and borrowing on platforms like Aave, Morpho, and Uniswap to structures that help the ultra-wealthy secure loans against their massive crypto fortunes.
What to know:
- Wealthy investors who hold much of their fortune in crypto are increasingly turning to decentralized finance platforms to secure flexible credit lines without selling their digital assets.
- Firms like Cometh help family offices and other rich clients navigate complex DeFi tools, using assets such as bitcoin, ether and stablecoins to replicate traditional Lombard-style collateralized loans.
- DeFi loans can be faster and more anonymous than traditional bank credit but carry volatility and liquidation risks, and Cometh is also experimenting with applying DeFi strategies to traditional securities via ISIN-based tokenization.
Top Stories
