Finance

Lista DAO Flags Vault Liquidity, Launches Emergency Vote

2 hours ago
Bitcoin Ethereum News

Key Highlights:

  • Lista DAO pressurizes MEV Capital and Re7 Labs for lack of repayments.
  • Emergency governance vote has been launched by ListaDAO.
  • Incident raises concerns about asset safety and transparency in decentralized lending. 

Lista DAO has intensified its push for responsibility and accountability from MEV Capital and Re7 Labs after long-lasting liquidity problems in their vaults. Concerns are growing over rising borrowing rates and the lack of repayment activity in collateralized assets. The increasing danger for lenders in the MEV Capital USDT and Re7 Labs USD1 vaults has led to quick governance action and made the lending protocol consider possible urgent emergency liquidation steps.

Recently, both vaults have exhibited highly abnormal borrowing dynamics, due to which users were not able to exit positions normally. Lista DAO, which operates as an on-chain peer-to-peer lending protocol, confirmed that collateral assets used within the vaults (sUSDX and USDX) are facing persistently high borrowing rates without any counterbalancing repayment flows.

“As an on-chain P2P lending protocol, Lista Lending has been actively engaging both teams to resolve the situation,” the DAO stated in a public post on X (formerly known as Twitter). “Continued inaction and delay will not solve the issue. We urge MEV Capital and Re7 Labs to take immediate responsibility: finalize decisions, communicate transparently, and work with us to protect users and restore market balance.”

Unresolved Market Imbalance

This situation has raised concerns over possible chain reactions across the DeFi lending space. Since there are no repayments, the vault’s collateral levels could drop fast, which could hurt liquidity and lower trust in the linked assets. The DAO believes the problem comes from poor management and unusual vault handling, not smart-contract issues.

Many users on social media agree with Lista DAO’s warnings, and are asking the involved teams to share clearer details about how they plan to fix these liquidity gaps. Market analysts say such lending problems on-chain can move fast into related liquidity pools, especially when stable asset pairs like USDX and sUSDX are affected.

Lista DAO stated that its team is already talking directly with MEV Capital and Re7 Labs and is pushing for a quick action. The DAO repeated its promise to provide open updates and protect users, saying governance tools will be used if these talks do not lead to any solid solutions.

Re7 Labs Issues a Statement

In the midst of all of this, Re7Labs issued a public statement on Lista DAO Discord and explained its plan to handle assets in the USDX market. The update, confirmed using Telegram details shared with the DAO, marks the first official comment from Re7 Labs since the issue began.

In reply, Lista DAO said it will begin a governance process, signalling that liquidation could be used next to avoid bigger losses across the lending platform.

Emergency Vote LIP 022 Introduced

Lista DAO then started an urgent governance vote named “LIP 022 Emergency Vote: Enabling Forced Liquidations for USDX Market (re7 vault).” The action, requested by the vault manager, asks to turn on forced liquidation tools for the USDX/USD1 market to reduce risk and restore stability.

The vote is active on Snapshot for an hour and holders of veLISTA tokens are urged to vote without delay. Votes placed after the window closes will not change the final decision, allowing the result to take effect right after the period ends.

There are only two voting choices, yes and no. If the voter chooses yes, they will be voting in favour of turning on forced liquidations for the USDX market on Lista Lending. If the voter chooses no, they will be voting to reject the plan and will keep the things unchanged.

Lista DAO explained that emergency action may happen even before the vote closes if volatility rises or liquidity issues worsen. The proposal link has been posted on X as well as on Discord.

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Source: https://www.cryptonewsz.com/lista-dao-flags-vault-liquidity-emergency-vote/