Aave, a major liquidity protocol within the decentralized finance (DeFi) industry has made an announcement that is concerning for the entire community.

The platform has announced that it has suspended several lending markets. For now, the protocol has clarified that they have halted the lending markets on a temporary basis.

Aave Halts 17 Tokens’ Lending Markets

The latest reports on the matter have confirmed that Aave has suspended the lending markets for multiple tokens on a temporary basis. The firm has announced that it has suspended the service for 17 tokens.

According to the officials, they have been observing very high volatility risks and they expect that the situation may worsen in near future.

Therefore, they have decided to temporarily suspend the 17 tokens’ lending markets to save the investors and the protocol from the high volatility risks.

The officials have claimed that they expect that the volatility will be used for the manipulation of the markets. Several protocols may attempt the same, which can cause a major problem for their protocol.

Governance Members Voted in Favor of Suspension

Aave is a DeFi protocol that offers public governance. Therefore, they had to take a governance vote before they proceed with the suspension.

They held a voting session among the governance members, and the votes were in favor of suspending the volatile lending markets.

Aave revealed that they ran each asset through an assessment to evaluate its low liquidity and volatility. If they were volatile and were pointing toward low liquidity, they were going to get suspended.

Asset Markets Suspended by Aave

In the notification, Aave has named the tokens they have suspended. The list also includes multiple stablecoins that have been suspended temporarily.

The list reveals that Aave has suspended xSUSHI, Maker, RENFIL, DeFi Pulse Index (DPI), Ampleforth (AMPL), Enjin (ENJ), and Basic Attention Token (BAT).

Other normal tokens include 1inch (1INCH), Decentraland (MANA), 0x (ZRX), Curve Finance (CRV), and Yearn.finance.

In addition to the above, the suspended stablecoins include RAI, Gemini Dollar (GUSD), Liquidity USD (LUSD), Pax Dollar (USDP), and sUSD.

Following the suspensions, the users are neither able to take loans in the particular cryptocurrencies nor they are able to make deposits to pay off their loans.

The Governance Proposal

The governance decision of suspending the tokens follows another major task of moving the Aave v2 to the v3 by migration and promotion.

According to the proposal, if the volatility of the suspended markets does not seem to come under control, the next step would be stricter. The proposal suggests that the particular tokens will be removed for good.

This means that the utility for the mentioned tokens would lower, meaning their trading prices will plunge tremendously.

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