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Aave V2 on Polygon experiences a glitch resulting in certain assets being trapped in contracts.
An issue in an earlier version of the crypto lending protocol Aave is preventing users from engaging with Wrapped Ether (WETH), Tether (USDT), Wrapped Bitcoin (WBTC), or Wrapped Matic (WMATIC) pools on Aave V2 Polygon, hindering the withdrawal of assets from these pools, as indicated by a proposal dated May 19 that seeks to resolve the issue through a patch. The proposal notes that users are currently unable to “supply more of those assets, borrow, repay, or withdraw.”
While withdrawals are not possible at this time, the team has assured that funds are “perfectly safe,” as the issue can be rectified following a governance vote.
.@AaveAave the recent upgrade of ReserveInterestRateStrategy in Aave V2 (Polygon) has led to a temporary suspension of the protocol, affecting assets valued at approximately $110M!
The underlying issue is that the new ReserveInterestRateStrategy is only compatible with Ethereum, and not with Polygon. https://t.co/kg5696QNPo pic.twitter.com/Ze3zSBS8Ck— BlockSec (@BlockSecTeam) May 19, 2023
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This bug exclusively impacts Aave V2 on Polygon. Aave V3, the latest version, remains unaffected, as do V2 deployments on Ethereum or Avalanche.
The malfunctioning code emerged due to a May 16 interest rate curve patch that was applied across all V2 deployments. The Polygon version of V2 utilizes a slightly different set of function definitions (referred to as an “interface”) for its rate strategy contracts compared to the implementations on Ethereum and Avalanche. However, the changes to the interest rate curve did not account for this distinction, resulting in the bug manifesting solely in the Polygon deployment.
The new proposal requests that Aave’s governing body, Aave DAO, sanction code modifications specifically for the Polygon version to address the patch. Voting is set to commence on May 20 and will run until May 23, as stated in the proposal.
Related: Aave DAO votes for ‘rescue plan’ to save lost tokens
Aave is primarily recognized for its flash loan functionality, which enables users to borrow cryptocurrency, execute trades, and repay the loans within the same block without the need for collateral. It originated on Ethereum but has been branching out into additional networks over recent years. On April 17, Aave governance voted to implement the protocol on zkSync Era, a layer 2 solution of Ethereum that employs zero-knowledge proof technology. On May 8, Aave V3 was deployed to the Metis network, which is also a layer 2 of Ethereum.
