Pac Finance — a lending protocol and an Aave fork on Blast network — saw a large amount of liquidations on April 11 after the platform suddenly decreased the liquidation threshold for user positions. 

"Random Aave fork on Blast decreased liquidation threshold (LT) instead of loan to value (LTV) causing $26M worth of unnecessary liquidations," Avara's Stani Kulechov, the creator of Aave, said on X while reposting news of the liquidations.

The developer wallet adjusted a function on Pac Finance’s PoolConfigurator-Proxy contract, which brought down the liquidation threshold of Renzo restaked ether (ezETH) loans without prior announcement or a timelock, resulting in large  liquidations. 

Reducing the liquidation threshold in a lending platform can cause a surge in …