Krisztian Sandor is a reporter on the U.S. markets team focusing on stablecoins and institutional investment. He holds BTC and ETH.
Decentralized lending protocol Compound Finance passed a proposal to impose loan limits and introduce new borrowing caps to lower risk on its platform.
The community voted overwhelmingly in favor of introducing or lowering the maximum borrowing amount for 10 cryptocurrencies, including wBTC, LINK and UNI.
“Setting borrow caps helps avoid high-risk attack vectors while sacrificing little capital efficiency and allowing for a threshold of organic borrow demand,” the proposal read.
The voting concluded on Monday and it is in the queue for execution at press time.
The passed proposal introduces borrow caps for five cryptocurrencies and sets stricter loan limits for another five. (Compound Finance)
Compound’s action comes after an alleged exploit attempt on Aave – a rival lending platform – brought scrutiny to any potential vulnerabilities in decentralized finance (DeFi) protocols’ lending mechanism.
The exploiter, who appeared to be infamous DeFi trader Avi Eisenberg, borrowed large sums of illiquid CRV tokens on Aave in an attempt to create bad debt on the protocol. Aave froze borrowing in 17 crypto assets Monday to mitigate risk from potential attacks before its network upgrade.
Eisenberg became known for his self-described “highly profitable trading strategy” exploiting a loophole on Solana-based Mango Markets, draining $114 million from the protocol last month.
Sign up for Crypto for Advisors, our weekly newsletter defining crypto, digital assets and the future of finance.
By signing up, you will receive emails about CoinDesk product updates, events and marketing and you agree to our terms of services and privacy policy.
DISCLOSURE
Please note that our
and
do not sell my personal information
has been updated
.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a
strict set of editorial policies.
CoinDesk is an independent operating subsidiary of
which invests in
and blockchain
As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of
which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG
.
Krisztian Sandor is a reporter on the U.S. markets team focusing on stablecoins and institutional investment. He holds BTC and ETH.
Krisztian Sandor is a reporter on the U.S. markets team focusing on stablecoins and institutional investment. He holds BTC and ETH.
