The Aave community is seeking to reduce its protocol exposure to the Curve DAO token, with two proposals open for voting on Aug. 10. The move comes in an attempt to limit the risk posed to the lending protocol by the large borrowing position held by Curve Finance founder Michael Egorov.
Curve DAO (CRV) is the native token of the decentralized finance (DeFi) protocol Curve Finance. Egorov deposited over 30% of CRV’s total market capitalization as collateral to take out nearly $60 million in loans on Aave v2. However, Curve’s hack on July 30 impacted its token price, making Egorov’s position vulnerable to liquidation.
Until Aug. 12, Aave tokenholders can vote on two proposals. One seeks to reduce the liquidation threshold by 6% for CRV on Aave v2, which could result in user accounts becoming subject to liquidation upon approval. The second disables borrowing of CRV on Ethereum and Polygon v3, thus disabling the ability to short CRV via the Aave protocol.
At the time of writing, over 571,000 votes have been cast, with 100% of holders supporting limiting Aave’s exposure to CRV.
Amid fears of liquidation surrounding Egorov’s loans, the Aave community is also voting on a third proposal ending on Aug. 11. In the proposal, Aave Chan founder Marc Zeller
