{"id":562501,"date":"2023-03-11T23:18:37","date_gmt":"2023-03-11T20:18:37","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/aave-freezes-stablecoin-trading-on-avalanche-v3-as-activity-surges-on-cexs\/"},"modified":"2023-03-11T23:18:37","modified_gmt":"2023-03-11T20:18:37","slug":"aave-freezes-stablecoin-trading-on-avalanche-v3-as-activity-surges-on-cexs","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/aave-freezes-stablecoin-trading-on-avalanche-v3-as-activity-surges-on-cexs\/","title":{"rendered":"# Aave freezes stablecoin trading on Avalanche V3 as activity surges on CEXs"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 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-6a414114957fb\" 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-6a414114957fb\" 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\/aave-freezes-stablecoin-trading-on-avalanche-v3-as-activity-surges-on-cexs\/#%E2%80%9D_Aave_freezes_stablecoin_trading_on_Avalanche_V3_as_activity_surges_on_CEXs_%E2%80%9C\" >&#8221; Aave freezes stablecoin trading on Avalanche V3 as activity surges on CEXs  &#8220;<\/a><\/li><\/ul><\/nav><\/div>\n<h1><span class=\"ez-toc-section\" id=\"%E2%80%9D_Aave_freezes_stablecoin_trading_on_Avalanche_V3_as_activity_surges_on_CEXs_%E2%80%9C\"><\/span>&#8221; Aave freezes stablecoin trading on Avalanche V3 as activity surges on CEXs  &#8220;<span class=\"ez-toc-section-end\"><\/span><\/h1>\n<div class=\"post-content\" data-v-48054ca8>Lending protocol Aave has frozen stablecoins trading and set Loan-to-Value (LTV) ratio to zero in response to recent price volatility on stablecoins after the USD Coin (USDC) depegged on March 11.\u00a0<\/p>\n<p><a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/governance.aave.com\/t\/arc-stablecoin-volatility-risk-parameter-recomendations\/12241\">According<\/a> to the Aave&#8217;s governance forum, the trading freeze follows an analysis from DeFi&#8217;s risk manager company Gauntlet, recommending that all V2 and V3 markets should be temporarily paused. <\/p>\n<p>&#8220;Setting LTV to 0 definitely helps everywhere, but on the Avalanche v3 Pool, given that cross-chain infrastructure doesn\u2019t cover Avalanche, the Aave Guardian can act im<a href=\"https:\/\/buradabiliyorum.com\/en\/category\/social-mediaa\/\" data-internallinksmanager029f6b8e52c=\"1\" title=\"Social Media\" target=\"_blank\" rel=\"noopener\">media<\/a>tely. Setting LTV to 0 in practise discounts the \u201cborrowing power\u201d of the asset, without affecting the HF of any user position,&#8221; noted one participant in the forum discussion.\u00a0<\/p>\n<p>LTV is an important metric that determines how much credit you can secure using crypto as collateral. Expressed as a percentage, the ratio is calculated by dividing the amount of credit borrowed by the value of collateral. <\/p>\n<p>Gauntlet&#8217;s risk analysis examined the amount of insolvencies that might occur under different scenarios, considering that the price of USDC stabilizes, recovers, or declines significantly:<\/p>\n<blockquote><p>&#8220;V3 emode assumes correlation of stablecoin assets, but at this time, those correlations have diverged. The risk has increased given that the liquidation bonus is only 1% for USDC on emode. To account for these assumptions that no longer remain true, we recommend pausing the markets. [&#8230;] At current prices, insolvencies are ~550k. These can change depending on the price trajectory and further depegs.&#8221;<\/p><\/blockquote>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2023-03\/9047d159-8d80-4c17-bb85-6a6dd0a6ff0d.png\"><figcaption style=\"text-align: center;\"><em>Screenshot &#8211; USD balances by protocol and Assets by symbol and protocol. Source Gauntlet Network<\/em><\/figcaption><\/figure>\n<p>Centralized crypto exchanges have seen a surge in trading volume  in the past hours following the Silicon Valley Bank (SVB) collapse on March 10, according to digital assets data provider Kaiko. <\/p>\n<blockquote class=\"twitter-tweet\">\n<p lang=\"en\" dir=\"ltr\">Two big <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/search?q=%24USDC&amp;src=ctag&amp;ref_src=twsrc%5Etfw\">$USDC<\/a> markets on exchanges seeing heavy sell pressure and huge volumes in last 24 hours<\/p>\n<p>Despite plenty of reassurance on crypto twitter, most investors still selling USDC at a big discount <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/t.co\/W9uy2HHax4\">pic.twitter.com\/W9uy2HHax4<\/a><\/p>\n<p>\u2014 Conor Ryder (@ConorRyder) <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/ConorRyder\/status\/1634604007346917376?ref_src=twsrc%5Etfw\">March 11, 2023<\/a><\/p><\/blockquote>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<p>Silicon Valley Bank\u00a0was shut down\u00a0by the California Department of Financial Protection and Innovation on March 11 after bank run triggered by the banks latest financial reports showing it had sold a large chunk of securities worth  $21 billion at the time of sale,  at a loss of about $1.8 billion. The California watchdog also <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>ointed the Federal Deposit Insurance Corporation (FDIC) as the receiver to protect insured deposits.<\/p>\n<p>Circle, the company behind the USDC, disclosed on March 11 that $3.3 billion of its $40 billion reserves were stuck at SBV, leading the major stablecoin price to fall below its $1 peg and affecting many stablecoin ecosystems as a result.\u00a0<\/p>\n<p><template data-name=\"subscription_form\" data-type=\"defi_newsletter\"><\/template><\/div>\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>\n<\/p><\/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\/aave-freezes-stablecoin-trading-on-avalanche-v3-as-activity-surges-on-cexs\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8221; Aave freezes stablecoin trading on Avalanche V3 as activity surges on CEXs &#8220; Lending protocol Aave has frozen stablecoins trading and set Loan-to-Value (LTV) ratio to zero in response to recent price volatility on stablecoins after the USD Coin (USDC) depegged on March 11.\u00a0 According to the Aave&#8217;s governance forum, the trading freeze follows&#8230;<\/p>\n","protected":false},"author":1,"featured_media":562502,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/images.cointelegraph.com\/cdn-cgi\/image\/format=auto,onerror=redirect,quality=90,width=1200\/https:\/\/s3.cointelegraph.com\/uploads\/2023-03\/c9a42efa-3e62-4638-a286-65b35ece7494.jpg","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[92664,74894,75936,74863,74868,117],"class_list":["post-562501","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-aave","tag-blockchain","tag-circle","tag-cryptocurrencies","tag-defi","tag-business"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/562501","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=562501"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/562501\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/562502"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=562501"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=562501"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=562501"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}