Fewer than 9% of Aave V3 Core loans hold approximately 50% of all outstanding debt. These positions use E-mode and borrow WETH against liquid staking wrappers (weETH, rsETH, wstETH), creating a heavily levered Ethereum staking basis trade. The debt-weighted LTV reaches around 90%, the average health factor around 1.06, and leverage around 10.7 times. An 8% to 9% discount between wrappers and ETH could push the average health factor toward 1 and trigger liquidations. Galaxy’s May analysis showed that a 10% weETH depeg could leave $2.47 billion in debt against $2.42 billion in collateral, affecting approximately 205 accounts.
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