Aave votes to suspend Polygon PoS chain lending, which may lead to a loss of more than $300 million in TVL

PANews reported on February 26 that according to The Block, the Aave community has approved a proposal to significantly increase the risk parameters of the Polygon PoS chain, essentially stopping lending services on the chain. Currently, Aave is the DeFi protocol with the highest TVL on Polygon, with deposits exceeding $300 million.

The move stems from Polygon's proposal in December last year to use more than $1 billion in stablecoin reserves to generate income, which aroused concerns in the Aave community. Aave founder Marc Zeller proposed adjusting the risk parameters of Aave v2 and v3 to prevent further deposits and prevent users from borrowing against collateral. In the end, Aave DAO passed the proposal with 692,000 votes in favor and 117,000 votes against, reducing the loan-to-value ratio (LTV) of USDT and USDC on the Polygon PoS chain to 0%.

Polygon Labs CEO Marc Boiron once said that ideally Aave should maintain cooperation with Polygon, but the final decision depends on the attitude of the Aave community. Aave founder Stani Kulechov emphasized that this move is to reduce the risk of bridged assets and protect the safety of user funds. (Related reading: Polygon Ecosystem Crisis: AAVE and Lido collectively withdraw from the market, the trouble is caused by the "borrowing chickens to lay eggs" proposal )