Aave Oracle Error Triggers $27M in DeFi Liquidations

[bonk]

Decentralized lending platform Aave experienced a technical incident that led to the liquidation of roughly $27 million worth of Wrapped Staked Ether positions. According to a post-mortem report, the protocol applied an exchange rate that was about 2.85% below the real market value for wstETH and Lido staked Ether.

The issue was caused by a configuration mismatch in a risk-oracle system that affected pricing parameters and timestamps. While the incident forced the liquidation of about 10,938 wstETH, Aave confirmed that the protocol itself did not incur any bad debt as a result of the error.

[madmax]

applying an exchange rate 2.85% below market caused forced liquidations, demonstrating how small deviations can have outsized effects