AAVE Completes 5th Audit for Protocol V2: Hype of the Week

AAVE Completes 5th Audit for Protocol V2 and continues its meteoric rise, growing from an initial $8.17 million locked into the project in February 2020 to an astounding $4.95 billion as of today. Last week, Aave broke its all-time high, surpassing   $249.72; since then the price has almost doubled to $495.59.


Finland’s most prominent crypto project, Aave, launched in 2020 under the stewardship Stani Kulechov, following a rebranding of ETHLend. On Aave, lenders can place liquidity into a pool contract, where the provided liquidity can then be borrowed once a collateral has been offered. Through pool-based lending, full-funds are available and wait time to find a counterparty is reduced. To use Aave, users can simply connect an Ethereum wallet and decide whether to deposit or borrow funds.

V2 Protocol

On Monday, Aave released the results of its 5th external audit conducted by Sigma Prime. Sigma Prime, an information security company, is most well-known for its involvement in the Ethereum 2.0 Lighthouse implementation. The audit primarily focused on Aave’s Solidity implementation of its v2 smart contract.

Some of the core Aaave updates reviewed by Sigma Prime include Aaves:

  • Debt Tokenization
  •  Collateral Transfers
  •  Flash Loan updates
  • Structure Upgrade

According to the report, the auditing team found 11 issues during their assessment, one of which was classified as high-risk.  The high-risk item concerns the “Ineffective Check in” validiateBorrow() function used to ensure that users can perform borrows. As a result, key conditions for borrowing were not ensured or validated:

  •  stable rate borrowing enabled
  • the user has less collateral in the currency than borrow amount OR
  • the borrow amount is less than 25% of the liquidity.

Besides issues with the borrow function, the audit revealed no other pressing matters facing Aave – with Gauntlet Simulation Platform giving Aave a 95% Economic Safety Grade.