Simple yet brilliant security model from Aave

CN
3 days ago

Simple yet brilliant security model from Aave.

Using a native token for security is flawed:

Hack occurs -> token value drops as investors anticipate sales to cover losses -> value falls further when tokens actually are sold.

Now, lent assets like USDT or ETH are staked and slashing happens automatically in case of bad debt - no governance risk.

Other protocols should follow.


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