Lido responded to the liquidation event on March 10 caused by the CAPO oracle price error, stating that there will be no bad debt and that affected users will be fully compensated. The Lido Earn product was unaffected, and user funds are safe.

On March 11th, the decentralized lending protocol Aave experienced a large-scale liquidation event due to a misconfiguration of the price oracle. Approximately 34 accounts were liquidated, involving $26 million. The issue stemmed from desynchronized CAPO mechanism settings, which caused a brief misjudgment of the wstETH price. Although some users were affected, the Aave protocol remained financially unaffected and will initiate a compensation mechanism. Following the incident, the market reaction was stable, and the AAVE price increased.

Chaos Labs analysis indicates that the recent $27 million liquidation event of Aave was caused by a CAPO risk oracle configuration issue, leading to exchange rate calculation errors. Inconsistent smart contract parameters caused the liquidation to occur, but the protocol did not incur bad debt. The Aave treasury will cover the remaining losses, and it is expected that DAO compensation will not exceed 345 ETH.