Chaos Labs said in an Aave governance post-mortem that a technical incident affecting the CAPO risk oracle caused the reported wstETH/stETH exchange-rate cap to fall below the valid market rate on Ethereum Core and Prime, triggering roughly 10,938 wstETH in E-Mode liquidations.
According to the post-mortem, the problem came from a mismatch between the snapshotRatio and snapshotTimestamp used by the oracle. Because the ratio could only be raised gradually onchain while the timestamp still reflected a 7-day-old reference point, the protocol applied an effective exchange rate about 2.85% too low. Chaos Labs said the incident affected 34 accounts, led to about 116 ETH in liquidation bonuses and fees plus roughly 382 ETH in profit for third-party liquidators, and created about $26 million in liquidation volume, though no bad debt accrued to the protocol.
Aave said it temporarily cut the wstETH borrow cap to 1 on Core and Prime, manually realigned the oracle configuration, and has already recaptured 141.5 ETH through BuilderNet refunds to help compensate affected users. The next thing to watch is the compensation plan and any added guardrails to prevent another configuration mismatch.
Source: Aave Governance, post-mortem by Chaos Labs.
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