Aave founder: Immutable oracles and interest rate mechanisms pose potential disasters for lending protocols, while conflicts of interest among asset managers increase industry risks

Jinse Finance reported that yearn community member Schlag posted on X, stating that the reason for Stream's losses was high-leverage trading, directional trading, and concealing the use of user funds. Therefore, DeFi projects need to be standardized and transparent. Strict due diligence should be conducted, and vault operations should not only pursue returns but also focus on risk control. Leverage is a double-edged sword; while it amplifies returns, it also magnifies risks. Users need to pay attention to where their funds are going and choose projects with transparency. In response to this comment, Aave founder Stani.eth posted that “there is a lot here worth delving into, especially regarding immutable oracle price feeds, interest rate curves, and the issues that come with these parameters. This viewpoint is very accurate. For lending protocols, this kind of (design) combination is undoubtedly a ‘bad solution,’ and I hope the relevant parties can wake up in time before it’s too late. In addition, the article also points out the conflict of interest among asset managers—they take on excessive risks to compete. Building a secure decentralized finance (DeFi) system is already extremely challenging, and currently, not only do ordinary investors lack sufficient due diligence, but there are also problems at the (protocol) integration level. Let’s work together to build a more robust decentralized finance (DeFi) ecosystem.”