cryptocurrency

Aave Community Decides to Stop Borrowing ETH During Consolidation

  • The ETH borrowing moratorium scheme has a 96.18% backing.
  • About 214 thousand AAVE were used by voters to accept the proposal.

After the vote, the Aave community decided to put an immediate end to Ethereum borrowing until the merger. Given the intrinsic risks associated with borrowing Ethereum (ETH) on Aave in the wake of the Merge and Ethereum hard fork, the community voted to put an end to ETH borrowing.

The ETH borrowing moratorium was ready for a vote in the Aave Community Governance Survey between August 30 and September 2. The scheme to borrow ETH and pay off 60 AAVE tokens has a huge boost, with 96.18% in its favour.

Avoid difficult situations

The alternatives that receive 3.07%, 0.13% and 0.62% of the vote, respectively, are to pause ETH borrowing and specify token payment in a separate proposal, no moratorium on ETH borrowing, and abstain from voting.

To avoid the proxy in connection with the proposal, the community agreed to freeze ETH borrowing and transfer 60 AAVE from Aave Treasury to MakerDAO. As a matter of fact, about 214 thousand AAVE were used by voters to accept the proposal.

According to Aave, people may exploit the new ETHW token. This can be done by borrowing ETH before merging and spending it on unsuitable things. This could lead to a huge demand for Ethereum (ETH) on Aave just prior to the merger. It may also result in negative liquidations and an annualized percentage return. There is a greater possibility that Aave will go bankrupt as a result.

After the motion to pause ETH borrowing on Aave was voted on and passed, the community has taken all necessary precautions. The Avi Dao He also approved the request to participate in the Ethereum merger. However, the lending platform has rejected any hard fork Ethereum.

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