Aave founder: DeFi lending protocols need circuit breakers to guard against oracle risk

Nov. 12 — Aave founder Stani Kulechov said at the DAS London conference held on Nov. 11 that DeFi lending protocols need to introduce "circuit breakers," because once an oracle fails, it may take years to undo the consequences, according to Crypto Briefing. He noted that systems relying excessively on immutable code lack contingency plans: when oracle data deviates, a protocol may trigger liquidations based on incorrect prices, and immutability makes the failure impossible to fix. The circuit breaker mechanism borrows from the practice in traditional markets of halting trading under extreme conditions, allowing a protocol to pause operations until the problem is identified.