Fixing Toxic Liquidation Spirals in Defiby@oraclesummit
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Fixing Toxic Liquidation Spirals in Defi

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AAVE v2, a lending platform on Ethereum, incurred bad debt resulting from a major liquidation event involving a single user who had borrowed close to $40M worth of CRV tokens. AAVE withstood the exploit, and the hacker was left with nearly $10m in losses. But, the protocol was left. with almost $2m in bad debt –  debt that cannot be recovered.

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