Aave to Overhaul Collateral, Listing Standards After KelpDAO Hack
Summary
- Aave said it plans to overhaul its collateral assessment and listing standards after the KelpDAO hack.
- Aave said it will take a broader view of price volatility, cybersecurity, interoperability and technical architecture when evaluating collateral assets.
- The market is focused on whether DeFi protocols tighten security and collateral risk-management standards, as well as on the scope of the new rules and the ecosystem's response.
Forecast Trend Report by Period
Aave is revamping its risk-management framework after the recent KelpDAO hack, tightening the standards it uses to assess collateral assets.
CoinDesk reported on May 7 that Aave plans a sweeping overhaul of its collateral assessment and listing criteria.
Under the new framework, the protocol will assess collateral assets based not only on price volatility, but also on cybersecurity, interoperability and technical architecture.
Aave also plans to establish and publish a new minimum-standard playbook for issuers seeking to list on the protocol.
Linda Jeng, chief legal and policy officer at Aave Labs, said the existing risk-management framework had been too narrowly focused on financial risk and volatility.
"This time, the entire ecosystem bailed itself out, not the government," she said. "As the crisis unfolds, the bar is getting higher."
Market attention is on whether DeFi protocols move to strengthen security and collateral risk-management standards. The scope of the new rules and the ecosystem's response will be key variables.
JH Kim
reporter1@bloomingbit.ioHi, I'm a Bloomingbit reporter, bringing you the latest cryptocurrency news.
