Tydro, the largest lending protocol on Kraken’s Ink Layer 2, will keep its markets paused until a migration to Chainlink price feeds is complete, the protocol said Thursday.
The Protocol was notified by Chaos Labs on May 4 of an attack on the oracle provider that showed “patterns similar to those of a nation-state attacker”, and was advised to shut down all markets. According to Tydro, no bad prices were pushed to the markets before or during the break and no user positions were affected.
Tydro initially suspended all credit markets on May 4 “out of an abundance of caution” while working with Chainlink and RedStone to introduce new push feeds on Ink as quickly as possible.
About 48 hours after the initial alert, Chaos Labs confirmed that compromised keys had been rotated and that resuming the pause was technically possible. Tydro chose to keep the markets offline until a second push oracle was available.
Path forward
Once the Chainlink migration is complete, the feed update will activate a 48-hour time slot before markets can resume, with an exact resume time published after the trade has been executed.
Tydro will also implement a four-hour grace period during which borrowers with a health factor of less than 1 can repay loans or replenish collateral without facing liquidation. The team also said it will review all user positions before the restart and adjust market parameters if they have become unhealthy, although preliminary analysis suggests no changes will be necessary.
A full post-mortem on oracle hardening and multi-oracle redundancy plans will be published once the markets are back online.
The incident comes at an important time for the protocol. Tydro, a white-label implementation of Aave v3 that launched in October 2025, has driven almost all of Ink’s recent growth, with its total market size recently surpassing $700 million.
This article was written using AI workflows. All of our stories are curated, edited, and fact-checked by a human.