MakerDAO Pauses AAVE Lending Activities The decentralized org | Crypto World Analysis

MakerDAO Pauses AAVE Lending Activities

The decentralized organization has voted for disabling the Direct Deposit Module on Aave, which is a direct way of turning off borrowing operations against derivatives like stETH, which had some issues in recent days following the decoupling of the asset from the original ETH due to a lack of liquidity on the platform.

The member of MakerDAO explained the organization's position on lending and borrowing operations on AAVE, saying that they believe it is risky to leave the operation intact as most borrowed DAI stablecoins are backed by stETH, which remains under heavy pressure. The stETH token is a derivative used for providing liquidity to Ethereum 2.0 validators who are willing to trade their stacked tokens without the transition of the main Ethereum network to the proof-of-stake consensus algorithm.

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