{"id":464128,"date":"2022-06-17T04:39:07","date_gmt":"2022-06-17T01:39:07","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/maker-cuts-off-aaves-dai-supply-as-fallout-from-celsius-continues\/"},"modified":"2022-06-17T04:39:07","modified_gmt":"2022-06-17T01:39:07","slug":"maker-cuts-off-aaves-dai-supply-as-fallout-from-celsius-continues","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/maker-cuts-off-aaves-dai-supply-as-fallout-from-celsius-continues\/","title":{"rendered":"#Maker cuts off Aave&#039;s DAI supply as fallout from Celsius continues"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_89 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6aede2bdc0441\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6aede2bdc0441\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-1'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/maker-cuts-off-aaves-dai-supply-as-fallout-from-celsius-continues\/#%E2%80%9CMaker_cuts_off_Aaves_DAI_supply_as_fallout_from_Celsius_continues%E2%80%9D\" >&#8220;Maker cuts off Aave&#039;s DAI supply as fallout from Celsius continues&#8221;<\/a><\/li><\/ul><\/nav><\/div>\n<h1><span class=\"ez-toc-section\" id=\"%E2%80%9CMaker_cuts_off_Aaves_DAI_supply_as_fallout_from_Celsius_continues%E2%80%9D\"><\/span>&#8220;Maker cuts off Aave&#039;s DAI supply as fallout from Celsius continues&#8221;<span class=\"ez-toc-section-end\"><\/span><\/h1>\n<p style=\"float:right;margin:0 0 10px 15px;width:240px\"><img decoding=\"async\" src=\"https:\/\/images.cointelegraph.com\/images\/840_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjItMDYvYmQxYWI1YTItMzU5Ni00NDk4LWJhNTQtMmU4MTdlMzg1MTI5LmpwZw==.jpg\" class=\"type:primaryImage\"><\/p>\n<pre><code>                The MakerDAO decided to cut off Aave from its direct deposit module as a safeguard in light of the possibility that Celsius folds and crashes the price of stETH.\n                &lt;p&gt;MakerDAO has voted to cut off lending platform Aave\u2019s ability to generate DAI for its lending pool without collateral as the risks of Celsius\u2019s liquidity crisis loom large over the entire crypto ecosystem.\n<\/code><\/pre>\n<p>The decentralized autonomous organization (DAO) made the decision as a means of mitigating the Maker protocol\u2019s exposure to the beleaguered staking and lending platform in case Celsius goes belly up and implodes the stETH peg as well.<\/p>\n<p>stETH is a token representing an amount of ETH that is staked on the Lido staking platform. Its peg to ETH has been wavering for several weeks and it\u2019s currently trading about 6% below the price of ETH. Celsius invested a significant amount of user funds into stETH, which is reportedly one of the reasons it paused withdrawals.<\/p>\n<blockquote class=\"twitter-tweet\">\n<p lang=\"en\" dir=\"ltr\">The Maker Governance has voted to temporarily disable the <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/AaveAave?ref_src=twsrc%5Etfw\">@AaveAave<\/a> DAI Direct Deposit Module (D3M).<\/p>\n<p>This change is available for execution on June 17 2022 21:03 UTC.<\/p>\n<p> <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/t.co\/3wKQiEvcMw\">https:\/\/t.co\/3wKQiEvcMw<\/a><\/p>\n<p>&mdash; Maker (@MakerDAO) <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/MakerDAO\/status\/1537217115677130754?ref_src=twsrc%5Etfw\">June 15, 2022<\/a><\/p><\/blockquote>\n<p>A June 14 governance proposal from DAO member prose11 <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/forum.makerdao.com\/t\/urgent-signal-request-set-aave-d3m-bar-to-0\/15800\">suggested<\/a> that the Maker protocol should temporarily disable the DAI Direct Deposit Module (D3M) for Aave because Celsius borrowed 100 million in DAI collateralized by stETH, which would be at risk of liquidation if Celsius fails. <\/p>\n<blockquote><p>\u201cThe reason we believe this is risky is because out of 200M DAI borrowed on Aave Ethereum v2, 100M DAI is being borrowed by Celsius and collateralized mostly by stETH.\u201d<\/p><\/blockquote>\n<p>The D3M allows Aave to <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/governance.aave.com\/t\/the-maker-direct-deposit-dai-module-d3m\/3514\">stabilize<\/a> the DAI loan interest rates by providing access to liquidity when needed. Aave\u2019s D3M consists of 200 million DAI, 100 million of which have been borrowed by Celsius.<\/p>\n<p>If Celsius does collapse, it might sell off its stETH to honor retail responsibilities and get liquidated on Aave, which would likely force stETH to depeg even further. This would put the Maker protocol at the risk of not being able to retrieve all the DAI Celsius borrowed.<\/p>\n<p>Around 58% of the 83 voters on the proposal felt that the tail risk presented by Celsius was greater than the loss of revenue from Aave by passing the proposal. The pause will come into effect at 5:03 pm ET on June 17.<\/p>\n<p><strong><em>Related: <\/em><\/strong><strong><em>BitBoy founder threatens class action lawsuit against Celsius<\/em><\/strong><\/p>\n<p>A separate June 14 governance <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/app.aave.com\/governance\/proposal\/83\/\">proposal<\/a> was put forth on Aave itself to determine whether it should freeze stETH, pause ETH borrowing, and increase the liquidation threshold for stETH borrowers. However, opponents have a steep edge on this proposal with nearly 90% of the vote at the time of writing.<\/p>\n<p>Maker\u2019s move is an example of decentralized finance (DeFi) protocols observing contagion in the ecosystem and attempting to protect themselves from getting tagged. In addition to Celsius, crypto investment firm Three Arrows Capital is now suffering the effects of contagion, and threatening to spread it further, with reports of a $400 million liquidation and its inability to meet margin calls. <\/p>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">News<\/a> articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/general\/\" target=\"_blank\" rel=\"noopener\">General category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"https:\/\/cointelegraph.com\/news\/maker-cuts-off-aave-s-dai-supply-as-fallout-from-celsius-continues\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8220;Maker cuts off Aave&#039;s DAI supply as fallout from Celsius continues&#8221; The MakerDAO decided to cut off Aave from its direct deposit module as a safeguard in light of the possibility that Celsius folds and crashes the price of stETH. &lt;p&gt;MakerDAO has voted to cut off lending platform Aave\u2019s ability to generate DAI for its&#8230;<\/p>\n","protected":false},"author":1,"featured_media":464129,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/images.cointelegraph.com\/images\/1200_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS9zdG9yYWdlL3VwbG9hZHMvdmlldy82MjU5ZDA4MmU4M2QyMDQ5MWY0MzA3NWMzOGQ5NzBlYS5wbmc=.jpg","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[],"class_list":["post-464128","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/464128","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=464128"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/464128\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/464129"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=464128"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=464128"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=464128"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}