Aave sets stablecoins’ LTV to zero on Avalanche V3

Aave has set the LTV of certain stablecoins on Avalanche V3 to zero to reduce the volatility risks caused by USDC’s price drop.
Dot
March 12, 2023
Ayush Pande

As a tech enthusiast who's always on the prowl for the latest developments concerning crypto and hardware, you can find him covering news stories or tinkering with PCs.

TABLE OF CONTENTS
Stani Kulechov; Photo Source: Solana (Youtube)

DeFi platform Aave (AAVE) has frozen stablecoin deposits and set their LTV to zero on Aave Avalanche V3 to reduce volatility risks caused by USDC’s price drop.

Earlier, risk management firm Gauntlet suggested pausing Aave V2 and V3 stablecoin markets after Circle-issued USDC lost its USD peg.

According to Gauntlet, its risk analysis revealed that many insolvencies could arise due to the high volatility of USDC. The proposal also extends to Avalanche (AVAX), Polygon (MATIC) and other marketplaces that support emode (Efficiency mode) on Aave Avalanche V3.



Get Our Free Newsletter

Subscribe to our newsletter to get tips, our favorite services, and the best deals on Bitcompare-approved picks sent to your inbox


Gauntlet’s proposal to halt all stablecoin markets on Aave protocol has received a lot of support from the community, with developer ChaosLabs adding,

“We support the proposal of freezing all stablecoins on Avalanche by setting LTV to 0. In addition, we recommend pausing stablecoin markets across all Aave deployments as a temporary phase until USDC, DAI, and other stablecoin peg situations clarify.”

Soon, Web3 developer BGD Labs confirmed that Aave has frozen deposits and borrowing facilities for USD Coin (USDC), Tether (USDT), Dai (DAI), Frax (FRAX), and MAI (MIMATIC).

Meanwhile, USDC has resumed an uptrend in its price. The stablecoin, however, has not regained a 1:1 peg to USD yet. As of writing, USDC's price hovers at the $0.98 mark.

Written by
Author's profile picture

Ayush Pande

Ayush Pande is a hardware, gaming, and crypto writer based in India. He's a tech enthusiast who's fascinated by the potential of blockchain technology.

Connect with Ayush on LinkedIn

Aave sets stablecoins’ LTV to zero on Avalanche V3

HomeDeFi
Contents
Stani Kulechov; Photo Source: Solana (Youtube)

DeFi platform Aave (AAVE) has frozen stablecoin deposits and set their LTV to zero on Aave Avalanche V3 to reduce volatility risks caused by USDC’s price drop.

Earlier, risk management firm Gauntlet suggested pausing Aave V2 and V3 stablecoin markets after Circle-issued USDC lost its USD peg.

According to Gauntlet, its risk analysis revealed that many insolvencies could arise due to the high volatility of USDC. The proposal also extends to Avalanche (AVAX), Polygon (MATIC) and other marketplaces that support emode (Efficiency mode) on Aave Avalanche V3.



Get Our Free Newsletter

Subscribe to our newsletter to get tips, our favorite services, and the best deals on Bitcompare-approved picks sent to your inbox


Gauntlet’s proposal to halt all stablecoin markets on Aave protocol has received a lot of support from the community, with developer ChaosLabs adding,

“We support the proposal of freezing all stablecoins on Avalanche by setting LTV to 0. In addition, we recommend pausing stablecoin markets across all Aave deployments as a temporary phase until USDC, DAI, and other stablecoin peg situations clarify.”

Soon, Web3 developer BGD Labs confirmed that Aave has frozen deposits and borrowing facilities for USD Coin (USDC), Tether (USDT), Dai (DAI), Frax (FRAX), and MAI (MIMATIC).

Meanwhile, USDC has resumed an uptrend in its price. The stablecoin, however, has not regained a 1:1 peg to USD yet. As of writing, USDC's price hovers at the $0.98 mark.

Written by
Author's profile picture

Ayush Pande

Ayush Pande is a hardware, gaming, and crypto writer based in India. He's a tech enthusiast who's fascinated by the potential of blockchain technology.

Connect with Ayush on LinkedIn
Ayush Pande

As a tech enthusiast who's always on the prowl for the latest developments concerning crypto and hardware, you can find him covering news stories or tinkering with PCs.

DeFi platform Aave (AAVE) has frozen stablecoin deposits and set their LTV to zero on Aave Avalanche V3 to reduce volatility risks caused by USDC’s price drop.

Earlier, risk management firm Gauntlet suggested pausing Aave V2 and V3 stablecoin markets after Circle-issued USDC lost its USD peg.

According to Gauntlet, its risk analysis revealed that many insolvencies could arise due to the high volatility of USDC. The proposal also extends to Avalanche (AVAX), Polygon (MATIC) and other marketplaces that support emode (Efficiency mode) on Aave Avalanche V3.



Get Our Free Newsletter

Subscribe to our newsletter to get tips, our favorite services, and the best deals on Bitcompare-approved picks sent to your inbox


Gauntlet’s proposal to halt all stablecoin markets on Aave protocol has received a lot of support from the community, with developer ChaosLabs adding,

“We support the proposal of freezing all stablecoins on Avalanche by setting LTV to 0. In addition, we recommend pausing stablecoin markets across all Aave deployments as a temporary phase until USDC, DAI, and other stablecoin peg situations clarify.”

Soon, Web3 developer BGD Labs confirmed that Aave has frozen deposits and borrowing facilities for USD Coin (USDC), Tether (USDT), Dai (DAI), Frax (FRAX), and MAI (MIMATIC).

Meanwhile, USDC has resumed an uptrend in its price. The stablecoin, however, has not regained a 1:1 peg to USD yet. As of writing, USDC's price hovers at the $0.98 mark.

Written by
Author's profile picture

Ayush Pande

Ayush Pande is a hardware, gaming, and crypto writer based in India. He's a tech enthusiast who's fascinated by the potential of blockchain technology.

Connect with Ayush on LinkedIn
Written by
Ayush Pande