High-Risk Loan Volumes On Aave Reach Critical Levels Amid DeFi Lending Surge

According to intoTheBlock, high-risk loan volumes on the Aave protocol are approaching critical levels as DeFi loan volumes soar to multi-year highs.

Investors are aggressively seeking to maximize profits ahead of a predicted crypto bull run, driving significant activity in the DeFi lending space.

The latest data reveals that outstanding DeFi loans have surged to $11 billion, the highest in two years. Aave plays a substantial role in this boom, accounting for over 50% of the total, or roughly $7 billion.

Of particular concern is the $1 billion in high-risk debt within the Aave ecosystem. This debt is backed by volatile collateral and sits within 5% of liquidation thresholds. In practical terms, if the value of this collateral drops by just 5%, borrowers will be required to add more collateral or face automatic liquidation of their positions.

According to @IntoTheBlock, high-risk loan volumes on Aave ptotocol are reaching critical levels as DeFi loan volumes hit multi-year highs. Investors are seeking to maximize profits ahead of an anticipated crypto bull run.

The Lending protocols perspective shows DeFi loans… pic.twitter.com/489EKdeirM

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