Summary:
Decentralized finance protocol Aave paused loans for Ether (ETH).Aave’s community voted and only your choice in light of Ethereum’s upcoming Proof-of-Stake upgrade.The protocol has recorded higher loan utilization rates before the Merge.Aave’s decision came shortly before Bellatrix, the initial of two stages before Ethereum’s final PoS transition, went live.
Aave, a decentralized finance lending protocol powered by Ethereum’s blockchain, has halted Ether (ETH) loans carrying out a community vote and only the pause because the Merge draws closer. The Merge is Ethereum’s switch from the proof-of-work consensus to proof-of-stake.
Crypto users can leverage Aave’s protocol to borrow Ether, the native digital asset in the Ethereum blockchain. Notably, the DeFi giant has seen increased lending demand inside the weeks before the Merge.
A proposal titled “Temporarily Pause ETH Borrowing” was put to a vote in Aave’s community. The proposal was built around concerns that Ethereum’s PoS upgrade could trigger a spike in Aave’s loan utilization rate.
Aave’s utilization rate represents the percentage of ETH loaned out contrary to the quantity of ETH left inside the protocol’s pool. Liquidity concerns took center stage within the city as anticipation continued to create around Ethereum’s PoS upgrade.
One major concern was that the use rate could hit 100% and leave Aave’s protocol in the center of a liquidity bottleneck. Indeed, the proposal which garnered support from 96.18% of community votes could serve as a deterrent against a liquidity crisis.
Block Analitica, an on-chain analysis outfit, echoed similar remarks and said “Temporarily pausing ETH borrowing will mitigate this threat of high utilization”.
Ethereum’s Bellatrix Upgrade Succesful, The Merge Much Closer THAN EVER BEFORE
Ethereum’s Bellatrix Upgrade scheduled for September 6, 2022, went live needlessly to say by core ETH developers and crypto proponents alike. The function marked the initial of two stages that encompass the Merge, a significant upgrade in Ethereum’s network.
ETH reacted for the Bellatrix upgrade which has a 6% jump in asset price. The crypto traded for about $1669 following news, per data from TradingView.
ETH Daily Chart (Source: TradingView)
Paris, the next stage on the Merge is likely to occur sometime between September 13-15, per a tweet from Ethereum founder Vitalik Buterin.
The merge continues to be likely to happen around Sep 13-15. What’s happening today may be the Bellatrix hard fork, which *prepares* the chain for any merge. Still important though – be sure to update your clients!
– vitalik.eth (@VitalikButerin) September 6, 2022
At press time, Ethereum’s Bellatrix Upgrade successfully shipped which has a network participation rate above 94%. Continue, developers would sunset public testnets like Kiln and plan the Paris upgrade later this September.
In like manner recap, post-Bellatrix, several stats:
– network participation rate is 94.94%
– amount of active validators is 403766
– amount of offline validators 17743
– and client diversity for consensus layer clients page will be updated tomorrow so we can check again then
– Christine Kim (@christine_dkim) September 6, 2022
Ethereum Merge Timeline