Aave suffers oracle glitch, triggering $26 million in unfair wstETH liquidations
A temporary oracle malfunction on Aave's Ethereum instances caused about $26 million in wstETH positions to be unfairly liquidated.Summary
DeFi protocol Aave experienced a temporary oracle malfunction on its Ethereum Core and Prime instances on March 10, leading to the unfair liquidation of approximately $26 million worth of wstETH positions across about 34 accounts. The issue was traced to a misconfiguration in the Correlated Asset Price Oracle (CAPO), Aave's safety mechanism, caused by an oversight in an offchain process that failed to account for an onchain constraint regarding the rate of increase for the snapshot ratio parameter. This resulted in the oracle reporting an exchange rate significantly lower than the actual market rate, triggering liquidations that benefited third-party liquidators by about 499 ETH. Chaos Labs, Aave's risk management provider, intervened to correct the oracle value and stated that Aave did not incur bad debt. A compensation plan is underway to reimburse affected users using recovered funds and assets from the DAO treasury.
(Source：The Block)