Aave votes to suspend Polygon PoS chain lending, which may cause over $300 million in TVL churn

PANews reported on February 26 that according to The Block, the Aave community has approved the proposal to significantly increase the risk parameters of the Polygon PoS chain and essentially stop lending services on the chain. Currently, Aave is the highest DeFi protocol on TVL on Polygon, with deposits of more than $300 million.

The move stems from Polygon's proposal to use more than $1 billion in stablecoin reserves to generate revenue in December last year, which has caused concerns in the Aave community. Aave founder Marc Zeller proposed to adjust the risk parameters of Aave v2 and v3 to prevent further deposits and prevent users from borrowing with collateral. In the end, Aave DAO passed the proposal with 692,000 votes in favor and 117,000 votes against the Polygon PoS chain, reducing the loan-to-value ratio (LTV) of USDT and USDC to 0%.

Polygon Labs CEO Marc Boiron has said that ideally Aave should maintain cooperation with Polygon, but the ultimate decision depends on the attitude of the Aave community. Aave founder Stani Kulechov emphasized that this move is to reduce the risk of bridging assets and protect the safety of user funds.