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The discussion focuses on a proposal to disable the lending and borrowing of the old Kyber Network Crystal (KNCL) on Aave and activate the new KNC, due to the migration of Kyber Network's governance token to a new smart contract address. This change is crucial to maintain liquidity and reduce the risk of liquidations, with the community largely supporting the proposed changes.
The discussion primarily revolves around the proposal by Denizined to disable the lending and borrowing of the old Kyber Network Crystal (KNCL) on Aave and instead activate the lending and borrowing of the new KNC. This suggestion comes in the wake of Kyber Network's governance token, KNC, migrating to a new smart contract address, leading to the renaming of the old KNC to KNCL. The migration has been widely adopted by most exchanges, resulting in a significant reduction in liquidity for KNCL.
The current situation on Aave shows approximately 1.3M KNCL, with 166k of this supply borrowed by users. The users have the option to convert their KNCL to the new KNC through a straightforward procedure on Kyber.org. However, if users persist in interacting with KNCL on Aave, they may face a liquidity crunch. This could make it challenging for borrowers to repay their debt and potentially increase the risk of liquidations1.
In conclusion, the discussion emphasizes the need for Aave to adapt to the changes in the Kyber Network's governance token. This adaptation is crucial to maintain liquidity and reduce the risk of liquidations for its users. The community seems to be in favor of the proposed changes, recognizing the potential risks associated with continuing to interact with KNCL.
Posted 2 years ago
Last reply 2 years ago
Summary updated 2 months ago
Last updated 06/12 00:44