{"id":12512,"date":"2024-04-12T16:21:49","date_gmt":"2024-04-12T13:21:49","guid":{"rendered":"https:\/\/forklog.com\/en\/aave-fork-on-blast-erroneously-liquidates-26-million-in-positions\/"},"modified":"2024-04-12T16:21:49","modified_gmt":"2024-04-12T13:21:49","slug":"aave-fork-on-blast-erroneously-liquidates-26-million-in-positions","status":"publish","type":"post","link":"https:\/\/forklog.com\/en\/aave-fork-on-blast-erroneously-liquidates-26-million-in-positions\/","title":{"rendered":"Aave Fork on Blast Erroneously Liquidates $26 Million in Positions"},"content":{"rendered":"<p>The lending protocol Pac Finance, modeled after Aave and based on the L2 solution Blast, encountered unexpected liquidations of user positions amounting to $26 million.<\/p>\n<blockquote class=\"twitter-tweet\" data-lang=\"en\">\n<p lang=\"en\" dir=\"ltr\">Random Aave fork on Blast decreased Liquidation Threshold (LT) instead of Loan to Value (LTV) causing $26M worth of unnecessary liquidations.<\/p>\n<p>Fundamental problem with forking code is the lack of in-depth knowledge of the software and the parameters. <a href=\"https:\/\/t.co\/eTNBlNBoqg\">https:\/\/t.co\/eTNBlNBoqg<\/a><\/p>\n<p>\u2014 Stani^ (@StaniKulechov) <a href=\"https:\/\/twitter.com\/StaniKulechov\/status\/1778693911763955870?ref_src=twsrc%5Etfw\">April 12, 2024<\/a><\/p><\/blockquote>\n<p> <script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p>\u201cAn ill-considered Aave fork on Blast reduced the liquidation threshold (LT) instead of the loan-to-value ratio (LTV), leading to unjustified closures of positions worth $26 million. The fundamental problem with using code is the lack of fundamental knowledge about the software and its parameters,\u201d commented Stani Kulechov, founder and CEO of <span data-descr=\"the company behind Aave\" class=\"old_tooltip\">Avara<\/span>.<\/p>\n<\/blockquote>\n<p>The Pac Finance team stated that they are aware of the incident and are \u201cin contact with the affected users.\u201d<\/p>\n<blockquote class=\"twitter-tweet\" data-lang=\"en\">\n<p lang=\"en\" dir=\"ltr\">Thank you for letting us know Will. We are aware of the issue and are in contact with the impacted users, actively developing a plan with them to mitigate the issue.<\/p>\n<p>In our effort to adjust the LTV, we tasked a smart contract engineer to make the necessary changes. However, it\u2026<\/p>\n<p>\u2014 Pac Finance (@pac_finance) <a href=\"https:\/\/twitter.com\/pac_finance\/status\/1778529972447252497?ref_src=twsrc%5Etfw\">April 11, 2024<\/a><\/p><\/blockquote>\n<p> <script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\"><p>\n<cite>\u201cIn an attempt to adjust the LTV, we tasked a smart contract engineer to make the necessary changes. However, we discovered that the liquidation threshold was unexpectedly altered without our knowledge, leading to the current issue,\u201d the developers admitted.<\/cite><\/p><\/blockquote>\n<p>They stated that in the future, they intend to implement a contract for managing limits and a forum for discussing all future updates to ensure they are well-planned.<\/p>\n<p>Crypto analyst known as 0xLoki <a href=\"https:\/\/twitter.com\/Loki_Zeng\/status\/1778646397149196723\">noted<\/a> that 93% of the liquidations were executed by a single address, whose owner profited approximately 244 ETH (~$854,000).<\/p>\n<p>In his view, the Pac Finance team should determine who benefited.<\/p>\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p>\u201cIf the liquidator and the parameter modifier are connected, then it is fraud. If not, it is merely an incident,\u201d he noted.<\/p>\n<\/blockquote>\n<p>Back in March, an exploit of the gaming Web3 platform Munchables on Blast was the largest incident of the month, causing $97 million in damage. The hacker <a href=\"https:\/\/forklog.com\/en\/news\/web3-project-munchables-recovers-97-million-lost-in-hack\">returned all the funds<\/a> without any conditions.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The lending protocol Pac Finance, modeled after Aave and based on the L2 solution Blast, encountered unexpected liquidations of user positions amounting to $26 million. Random Aave fork on Blast decreased Liquidation Threshold (LT) instead of Loan to Value (LTV) causing $26M worth of unnecessary liquidations. Fundamental problem with forking code is the lack of [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":12511,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"select":"","news_style_id":"","cryptorium_level":"","_short_excerpt_text":"","creation_source":"","_metatest_mainpost_news_update":false,"footnotes":""},"categories":[3],"tags":[1212,1270,1093,1097],"class_list":["post-12512","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news-and-analysis","tag-aave","tag-blast","tag-defi","tag-lending"],"aioseo_notices":[],"amp_enabled":true,"views":"18","promo_type":"","layout_type":"","short_excerpt":"","is_update":"","_links":{"self":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts\/12512","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/comments?post=12512"}],"version-history":[{"count":0,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts\/12512\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/media\/12511"}],"wp:attachment":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/media?parent=12512"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/categories?post=12512"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/tags?post=12512"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}