Fewer than 9% of loan positions on Aave account for roughly half of the protocol’s total outstanding debt, according to a risk assessment. This concentration is largely tied to E-mode users running leveraged positions involving WETH borrows backed by liquid-staking wrappers. Ethereum’s sharp intraday volatility has brought this structure back into focus, as correlated staking-loop strategies can become vulnerable when market conditions move quickly. Experts emphasize that this is not evidence of insolvency but rather a concentration risk that can make parts of the protocol more sensitive to sharp ETH moves.
Source: Read the original article
