AAVE ORACLE FAILURE SHAKES DEFI

A pricing glitch in Aave’s oracle system triggered roughly $26M in wrongful liquidations across 34 wstETH positions after the protocol reported a faulty exchange rate.

The liquidations were not caused by market moves — they were caused by bad data.

Aave confirmed the issue and stated that all affected users will be fully compensated, but the incident reignites a critical question for DeFi:

When the oracle fails, the entire system follows.