The lending protocol Tydro has suspended its market due to a suspected state-level attack and will resume operations after migrating to the Chainlink oracle.

The largest lending protocol on the Ink Layer 2, operated by a certain exchange, Tydro, stated yesterday that it will keep the market paused until the migration to the Chainlink price oracle is completed. On May 4, risk management agency Chaos Labs notified Tydro that its oracle provider had been attacked in a manner similar to nation-state actors, recommending the immediate suspension of all markets.

Tydro reported that no abnormal prices were pushed to its market before or after the pause, and user positions were not affected. Approximately 48 hours later, Chaos Labs confirmed that the compromised key had been rotated, making it technically possible to resume operations, but Tydro chose to keep the market paused until the second push oracle is in place. Once the migration to Chainlink is completed, a 48-hour time lock will be triggered, and a four-hour grace period will also be set, allowing borrowers with a health factor below 1 to repay or add collateral without being liquidated. Tydro is a white-label deployment of Aave v3, and the total market size has recently surpassed $700 million.