Aave unanimously rejects proposal to ice Mich's $CRV loan

Aave governance recently considered a proposal to “ice” or freeze the large CRV‑backed loan associated with Curve founder Michael Egorov on Aave v2 Ethereum, but the on‑chain vote was unanimously rejected by AAVE token holders. The proposal, advanced in the context of broader risk discussions around CRV on Aave, would have effectively frozen CRV as collateral on v2, preventing new CRV supply and new borrowing tied to it in order to limit concentration and liquidation risk. This followed months of scrutiny of Egorov’s highly leveraged CRV position, which had previously contributed to a significant bad‑debt event for Aave and prompted multiple risk‑management initiatives, including recommendations from Gauntlet and recapitalization plans for excess CRV debt. The rejection signals that Aave’s governance community currently prefers not to take the more extreme step of “icing” Mich’s CRV loan, despite ongoing concerns about large, concentrated collateral positions and their impact on protocol solvency in volatile markets. Instead, Aave has been pursuing more incremental risk controls—such as freezing new CRV collateral at other times, adjusting risk parameters, and using treasury funds to address prior CRV‑related bad debt—while allowing existing positions like Egorov’s to remain subject to normal protocol mechanics. The outcome matters for DeFi risk management because it illustrates the trade‑offs token holders face between aggressively de‑risking large positions and preserving flexibility and user neutrality, and it underscores the role of on‑chain governance in deciding how protocols respond to concentrated positions in volatile governance tokens like CRV.

✨ AI-generated background, compiled from web sources — not editorial content.

More coverage

• [ARFC] Gauntlet Recommendation on freezing CRV for Aave v2 ... (governance.aave.com)
• [ARFC] Repay Excess CRV Debt on Ethereum v2 - General - Aave (governance.aave.com)
• Curve Founder Pays Down Debts On Aave v2 - "The Defiant" (thedefiant.io)
• Feature or Flaw? Aave Left With $1.7M in Bad Debt - Blockworks (blockworks.com)
• CRV, Aave, and the Art of Liquidation - Kaiko (kaiko.com)

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