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Aave unfreezes V3 and V4 markets after Binance incident

Aave has reopened all lending pools across its V3 and V4 protocols following a security breach at Binance, confirming that its smart contracts were unaffected and user positions remained fully collateralized.

Split graphic showing the Aave protocol logo on a light purple background alongside the yellow Binance logo on a black background.
Image: @BSCNews

Aave has unfrozen all markets across its V3 and V4 lending protocols following a precautionary freeze prompted by an incident at Binance. The protocol confirmed that its smart contracts were unaffected by the breach and that user positions remained fully collateralized throughout the disruption.[1][2][3]

During the temporary halt, new deposits and borrows were paused, though withdrawals and loan repayments continued to operate normally, according to statements shared by Aave and reporting from BSCNews. Aave founder Stani Kulechov also confirmed that the lending protocol was not impacted.[1][2]

As an ongoing precaution to curb secondary market volatility and prevent bad debt, Aave temporarily set the loan-to-value ratio to zero for a selection of assets, including USDT, USDC, USDT0, POL, WAVAX, sAVAX, XAUT, PAXG, and OP. The adjustment ensures that these tokens cannot be used as collateral for new loans while the safeguard remains in place.[1][2][3]

Key facts

  • Aave reopened all lending and borrowing markets across its V3 and V4 protocols following a freeze triggered by a Binance security breach.
  • Aave confirmed its smart contracts were untouched and user positions remained fully collateralized.
  • Withdrawals and repayments continued normally during the market freeze while new deposits and borrows were paused.
  • Aave founder Stani Kulechov confirmed the protocol was unaffected.
  • Aave temporarily set loan-to-value ratios to zero for USDT, USDC, USDT0, POL, WAVAX, sAVAX, XAUT, PAXG, and OP to prevent them from being used as collateral for new borrows.

Sources 路 3 sources

  1. CB

    Crypto Briefing@Crypto_BriefingPost on X 路

    馃敁UPDATE: Aave has resumed lending and borrowing across its V3 and V4 markets after a precautionary freeze following the Binance hack. Founder Stani Kulechov confirmed the protocol was unaffected, though USDT, USDC, XAUT and PAXG remain restricted as collateral for new loans. https://t.co/FMCqf6V4XH

    Open source
  2. BS

    BSCN@BSCNewsPost on X 路

    Aave Reopens Its Markets Following Binance Hack @Aave has unfrozen all lending pools in V3 and V4 after a risk assessment triggered by the security breach at @Binance. According to the protocol, its smart contracts remained untouched. Positions remained completely collateralized, with repayments and withdrawals occurring seamlessly throughout the halt. To reduce secondary market volatility and prevent bad debts, governance has temporarily capped the Loan-To-Value of a wide range of assets at 0%. These assets cannot be collateralized.

    Open source
  3. TB

    The Block@TheBlockCoPost on X 路

    THE BLOCK: Aave has unfrozen all markets across its V3 and V4 protocols following the Binance incident, saying its smart contracts were unaffected and user positions remained fully collateralized. As a continued precaution, the protocol has temporarily set loan-to-value ratios to zero for USDT, USDC, USDT0, POL, WAVAX, sAVAX, XAUT, PAXG, and OP, preventing them from being used as collateral for new borrows.

    Open source