Lido protocol states that the Aave Oracle error does not affect the system

BlockBeats reports from the official statement of Lido that on March 3rd, a flaw occurred in Aave’s oracle system, leading to an unexpected event. However, the Lido team confirms that this error was related to the price reporting system and not due to any protocol malfunction.

CAPO Oracle Error: The Beginning of the Incident

The issue originated from Aave’s CAPO oracle price predictor, which reported the wstETH:USD price inaccurately compared to the reference price used by Aave. This discrepancy triggered asset recalls in E-Mode, resulting in losses. Additionally, it was found that there was a flaw in the price boundary settings on the predictor that requires fixing.

Recall Event and Its Impact

As a result of this incident, users holding wstETH were affected, losing approximately 345 ETH during the forced recall. However, the forced sale did not create bad debt, and all affected users will be fully compensated. Lido and Aave quickly identified and fixed the issue to prevent similar events from happening again.

Lido Protocol Confirms Security and Reassures Users

Lido explicitly confirms that this oracle price error does not involve the underlying assets or the core functioning of wstETH. The issue was limited to referencing prices from the predictor and was immediately addressed upon discovery.

User Assets Are Safe: Lido Earn and Other Products Remain Protected

Lido’s Earn products, including stRATEGY and GGV, were not affected by this incident. Users’ funds remain secure within the system. Both Aave and Lido pledge to monitor the situation closely to ensure risk mitigation measures are effective and that users’ assets are protected to the highest degree.