"The proposal filed as an Aave Request for Comment suggests raising Slope 2 from 10% to 40% and lowering optimal utilization from 92% to 87%. A follow-on governance vote would push Slope 2 to 50% and optimal utilization to 85%."
"Attackers exploited a vulnerability in KelpDAO's bridge to siphon unbacked rsETH, deposit it as collateral on Aave V3, and borrow an estimated $200 million to $300 million in assets, including WETH and stablecoins."
"Aave's total value locked (TVL) shed billions in a matter of days, with core markets, including ETH, USDT, and USDC, hitting 100% utilization, effectively trapping depositor funds."
Aave faced a liquidity crisis following a $292 million exploit of KelpDAO's rsETH bridge, draining up to $15.1 billion in total value locked. The USDC pool reached 99.87% utilization, with less than $3 million in available liquidity. Circle's Chief Economist proposed increasing the Slope 2 rate from 10% to 50% to restore liquidity. Aave's governance would need to approve this change, which would significantly raise borrowing costs for USDC users. The exploit led to a severe liquidity crunch, affecting core markets and trapping depositor funds.
Read at news.bitcoin.com
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