Demo Lending pauses one pool
The team paused one pool after a suspected exploit. Other depositors are not known to be affected, and a post-mortem is promised.
How crypto lending pools work
Lenders deposit into a shared pool, and borrowers post more collateral than they borrow. Automatic liquidations protect the pool until they don’t.
The basic loop
Depositors add tokens to a pool and earn interest. Borrowers lock up other tokens as collateral and take out a loan. Interest rates usually change with demand for the pool’s funds.
Liquidation
If the collateral’s value falls too far, the protocol can sell it to repay the loan. That protects lenders, but a borrower can lose collateral quickly in a sharp market move.
The risks
- Bugs in smart contracts
- Faulty price data from outside sources
- Fast liquidations during market stress
- Admin keys that can change the rules
Sources
[The Editor links primary sources here before publication.]
Disclosures
[AI use, holdings and commercial relationships are shown here.]