Aave Oracle Error Triggers $27M Liquidations in DeFi

* Oracle misconfiguration triggers $27 million in liquidations. * Incident affects 34 users; liquidators profit by 499 ETH. On March 10, 2026 (UTC), a technical misconfiguration in Aave's Correlated Assets Price Oracle (CAPO) system triggered approximately $27 million in liquidations. The event was reported by multiple outlets, including Phemex and TradingView. The issue arose from a 2.85% pricing discrepancy in the valuation of wrapped staked Ether (wstETH), a key collateral asset within the Aave protocol. The pricing error was caused by unsynchronized parameters within the CAPO risk oracle system, where a misalignment between the reference exchange rate and its corresponding timestamp temporarily undervalued wstETH by 2.85%. This mispricing falsely flagged certain leveraged borrowing positions as undercollateralized and automatically triggered liquidations. The incident affected a total of 34 users, while liquidators—automated high-frequency bots that handle liquidation processes—profited by an estimated 499 ETH. Aave itself did not incur any bad debt from the event, and following the incident, its risk management partner Chaos Labs identified the exact issue and implemented a fix. Aave’s governance subsequently proposed to fully compensate impacted users with funds from the DAO treasury and recovered assets. Meanwhile, Lido, the issuer of wstETH, confirmed that its token and underlying protocol functioned normally and were not responsible for the pricing anomaly. As of March 16, 2026, at 15:08 UTC, market data shows Aave (AAVE) trading at $120.453. Its 24-hour trading volume increased by 6.639%.