Following an unexpected high-magnitude minting transaction of pyUSD (TX), and even if the same amount was soon after burnt (TX), we have recommended the Aave Protocol Guardian to freeze the pyUSD reserve until we have total clarity of what exactly happened on the asset issuance stage.
Important to clarify that at the moment, everything indicates that the over-minting was caused by an operational mistake, and the Aave protocol is perfectly safe.
We have confirmed with the minting platform that, effectively, there is no type of security breach, and the problem was just on the operational side of the minting flow.
Further communications from the pyUSD side will follow.
Confirmation from the Paxos official account of the unexpected minting being caused by an internal technical error https://x.com/Paxos/status/1978565015943950411.
We will recommend the Aave Protocol Guardian to unfreeze the asset, given that we don’t identify any potential problem.
We can confirm the Aave Protocol Guardian has unfrozen the pyUSD reserve.
The event was well handled by Paxos and BGD team. Yet it’s also underlying that PYUSD mint miss some protection. Thankfully guardians react quickly and Aave’s supply cap mitigate the risk for the protocol.
I personally think that oversized mint with magnitude over totalSupply must be time-locked or approved manually by Paxos.
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