Aave suspends voting on lending on the Polygon PoS chain, which may lead to a loss of over $300 million in TVL

2025-02-26 08:06:58

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ChainCatcher news, according to The Block, the Aave community has approved a proposal to significantly increase the risk parameters on the Polygon PoS chain, effectively halting lending services on that chain. Currently, Aave is the DeFi protocol with the highest TVL on Polygon, with deposits exceeding $300 million.

This move stems from a proposal made by Polygon last December to utilize over $1 billion in stablecoin reserves for yield generation, raising concerns within the Aave community. Aave founder Marc Zeller proposed adjusting the risk parameters for Aave v2 and v3 to prevent further deposits and stop users from borrowing against collateral. Ultimately, the Aave DAO passed the proposal with 692,000 votes in favor and 117,000 votes against, reducing the loan-to-value (LTV) ratio for USDT and USDC on the Polygon PoS chain to 0%.

Polygon Labs CEO Marc Boiron has stated that ideally Aave should maintain its partnership with Polygon, but the final decision depends on the attitude of the Aave community. Aave founder Stani Kulechov emphasized that this move is aimed at reducing the risk of bridging assets and protecting user funds.

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