During a security review of the Aave protocol, a technical problem has been detected, affecting a small sub-set of assets under specific circumstances and configurations.
In order to be cautious and reduce any type of risk, as technical service providers of the DAO we have recommended to the Aave Guardian to temporarily halt new supplying and borrowing of WMATIC, MATICx and WAVAX, with all other functionality remaining fully operative.
To be clear, no funds are at risk and all other assets and pools are operating as always.
We will keep the investigation, and communicate more details to the community in due time.
Can you please provide a specific timeframe on how long will MATIC market will be frozen on Polygon V3?
I need to make time sensitive risk management decisions depending on how long Matic market will be frozen.
Yes, any more information about this will be very appreciated. The market is extremely volatile right now and the timing of this decision couldn’t be worse.
Was this really a technical issue or just a liquidity issue following the massive liquidations of MATIC and AVAX in the last 12 hours ?
Hi, @JohnPauls !
It’s a purely technical issue, not related with liquidity at all.
@bgdlabs will provide more information about the timeline in a short period of time.
Looking forward to updates …
Recognize you can’t say precisely, but could the team provide any kind of rough order of magnitude on expected timing here? i.e. Are you anticipating more of a 6 hours or 6 days kind of thing?
The radio silence for almost 24hrs after freezing assets is indicative of liquidity issues…
Please update us when you’re going to unfreeze Matic so we can decide to move out of AAVE ASAP or not.
As an update to the community:
- We are still working on this, and we can’t still estimate a precise timeline for its resolution. Highly probably will require a governance proposal, which would extend the freezing for some days, given the voting duration limitations.
- There is no liquidity problem or funds at risk. Withdrawals and repayments on the assets frozen are completely active, together with liquidations. Only “additive” actions like supplying and borrowing them are halted.
- Given the isolated nature of the protections, it is possible to use any other asset of each pool to refill collateral in any position, including those with similar denomination as sAVAX and stMATIC.
As always, our priority as service providers of the DAO is to look for the security of the protocol, and we will keep informing the community about any following steps.
How could there be a technical issue with MATIC, but not with OP or ARB? Aren’t these L2’s similar in integrations with Aave?
I appreciate the workaround, but sAVAX only has an LTV of 30%, which makes it pretty useless as collateral.
As an update for the community:
We will be creating a governance proposal to apply permanent fix regarding the technical problem detected.
We have asked Certora (security service provider of the Aave DAO) and Avara Labs (development contributor) to review the proposal for extra assurance, and to comment on this threat certifying that no issue has been detected during the review.
Once that review procedure is finished, we will proceed with the proposal creation.
Thank you for this quick update.
Is it safe to assume Certora review will take 12-24hrs then the proposal would take 24-48hrs to be voted on?
no, the governance process is always 5 days
1 day pending
3 days of voting
1 day timelock
So roughly 5 days before proposal execution.
edit: Sorry first wrote it’s 6, although is 5.
Behalf of Aave Labs, confirming that we have reviewed the technical issue and the proposed BGD fix, and we confirm that the fix addresses the issue completely and precisely, while not impacting any other elements of the Protocol.
Thank you for getting this done in a timely manner
On behalf of Certora, i can affirm that we reviewed the proposed solution for the issue and that the implementation indeed resolves the problem with no undesired side effects.
Certora will vote YES on the proposal once voting starts
What happened??? Is this how it works? I didn’t monitor it for 3 days, I don’t follow social media. I left MATICX and MATIC in lending and with a safe margin and I was liquidated, why yes??? Do I always have to be in front of the computer??? Is that what SAFETY is???