DeFi lending platform Aave sees $27 million liquidations after wstETH price glitch
Aave experienced $27 million in liquidations due to a temporary pricing glitch in its CAPO risk oracle for the wstETH token.Summary
The decentralized lending platform Aave saw approximately $27 million liquidated over 24 hours, likely triggered by a temporary pricing error involving the staked ether token, wstETH. Risk management firm Chaos Labs identified the cause as a configuration issue in Aave's CAPO risk oracle, which limits how fast yield-bearing tokens' values can increase. Stale parameters in a smart contract caused the CAPO system to value wstETH about 2.85% lower than its actual market rate, pushing some borrowing positions below safety thresholds. While the protocol incurred no bad debt, liquidators profited from the temporary price discrepancy. A Lido contributor confirmed the issue was specific to the oracle mechanism and did not affect the Lido protocol itself.
(Source：CoinDesk)