Tydro, the Aave-powered lending protocol on the Ink blockchain, halted all markets and its $247 million in deposits on May 4 after identifying critical issues with a third-party oracle provider. The protocol, which holds over $206.7 million in active loans, announced the pause while assuring users their funds remain safe.
"We are temporarily pausing all markets out of an abundance of caution following reports of issues with a third-party oracle," the Tydro team said in a post on X. The protocol urged users to revoke token approvals as a precautionary measure but gave no timeline for when services would be restored.
The incident freezes significant on-chain activity. Tydro has over $206.7 million in active loans and generated more than $943,000 in fees over the last 30 days, according to data from DefiLlama. The protocol operates as a non-custodial lending market for onchain capital markets, built on the Ink blockchain and powered by Aave.
The shutdown represents a sharp reversal of fortune for the protocol, which was recently positioned as a rescuer in a major DeFi crisis. On April 23, Tydro joined the Ink Foundation and Aave in a "coordinated DeFi relief effort" to help mitigate bad debt from the $290 million KelpDAO rsETH exploit that impacted the Aave protocol. That event triggered more than $15.1 billion in outflows from Aave, and Tydro's assistance was part of a broader ecosystem response. The current freeze underscores the persistent systemic risks associated with oracle dependencies, where protocols rely on external data feeds to execute smart contracts.
This article is for informational purposes only and does not constitute investment advice.
