Oracle error adds to turmoil at DeFi giant Aave

0:00headline, Oracle Error adds to turmoil at DeFi Giant Avae, published at 2.26pm, March 11th, 2026. Almost 27 million dollars worth of liquidations were triggered on DeFi lending giant Avae yesterday thanks to a faulty price cap Oracle update. The correlated asset price Oracle, Cpo, run by risk manager Chaos Labs, sets caps for the price ratio between correlated assets in order to protect against price manipulation attacks on the protocol. In a post to the Avae governance forum, Chaos Labs explained that due to a time stamp mismatch, the price ratio between WSTETH and STETH was capped below the current market rate, causing a price drop of 2.85%. This was enough to liquidate those positions close enough to the liquidation threshold.

1:03The company's dashboard, filtered for WSTETH, shows 21.2 million dollars of liquidations on Avae's Ethereum core instance and a further $5.7 million on its prime instance. Read more. Avae developer BDG Labs to cease contribution after DAO drama. Chaos Labs founder, Omar Goldberg, promised that all affected users will be fully reimbursed. He says that since launching over a year ago, its oracles have streamed over 1,200 payloads for approximately 3,000 plus parameters with zero incidence. While the protocol didn't suffer bad debt, liquidators profited approximately 500 ether, ETH, worth $875,000. Around 30% of this, 154 ETH,

2:09was recovered and will be used to reimburse users with the remainder coming from the Avae Treasury. A similar pricing error resulted in $1.8 million of bad debt DeFi protocol Moonwell last month. In an AI co-authored update, the ratio between ETH and CBETH was used to price CBETH in dollars. Liquidating borrowers whose collateral was suddenly worth $1.12 instead of around $2,200. The damage for Avae may not have been too severe this time, but one blockchain security professional questioned why the changes aren't run through a transaction simulation before going live. A simple sanity check which could prevent more serious losses and even bad debt in future. Avae in crisis. The malfunction comes during a period of tumult for decentralized finances

3:14number one protocol. Since December last year, the DAO and Avae labs have been in dispute over who really controls Avae. The SPAT has seen DAO service providers accuse founder Stani Kulichov's Avae labs of playing dirty and pushing through plans for an upcoming V4 of the protocol. Indeed, two key service providers have recently thrown in the towel. Developer BGD labs left last month over labs snubbing of the wildly successful V3 in favor of the labs developed V4. Shortly after, Mark Zeller's ACI reached breaking point following the recent Avae will win vote which swung narrowly in labs favor. Got a tip? Send us an email securely via Proto's leaks. For more informed news and investigations, follow us on X, Blue Sky, and Google News,

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