Aave sees $27M in forced liquidations in a single day

The crypto lending protocol Aave experienced large-scale liquidations totaling $27 million over the past 24 hours, CoinDesk reported. While initial speculation pointed to a problem with an oracle from risk management firm Chaos Labs, the company clarified that the issue was not with the oracle itself. Instead, Chaos Labs stated that a misconfiguration of Aave's internal safety mechanism, known as CAPO, was the cause. The firm explained that this led to wstETH being undervalued, which pushed some loan positions below their liquidation thresholds and triggered the forced liquidations. Liquidation bots earned 499 ETH in profits during the process.