Aave token holders started voting today for two governance proposals in response to the systemic liquidation risk posed by Curved founder Michael Egorov’s large borrowing position on the lending protocol.

Authored by on-chain risk management platform Chaos Labs, the two proposals aim to disable the borrowing of CRV – the native governance token for stablecoin exchange Curve – on Ethereum and Polygon V3, as well as reduce the liquidation threshold of CRV.

Aave’s governance votes, which both end Aug. 12, are direct responses to the averted liquidation threat posed by Egorov’s lending positions on Aave, in which he deposited 34% of CRV’s total market cap to borrow upwards of $63 million.

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As a result of the recent Curve exploit, which saw the price of CRV plummet, Egorov’s assets were under liquidation pressure. Even though Egorov is now in a better financial position after raising over $42 million by selling CRV in several OTC deals to pay off portions of his debt, the potential liquidation motivated Aave token-holders to start voting on whether to disable CRV borrowing and reduce the liquidation threshold for CRV.

Chaos Labs CEO Omer Goldberg indicated in the governance vote that the motivation behind one of the proposals “is to disable the ability to short CRV via the Aave protocol,” which would prevent crypto users from borrowing CRV to dump and further impact its price.

AAVE is currently exchanging hands at $67.78, while the price of CRV is 61 cents, per CoinDesk market data.

Goldberg did not respond to a request for comment by presstime.

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