Aave V3 Experiences Record Liquidations Amid Market Turbulence

This month, Aave V3 saw a dramatic spike in liquidations, with $10 million liquidated in a single day, the highest amount since April.

This surge in liquidations has contributed to a downward spiral in asset prices, as the selling pressure from these liquidations exacerbates market declines.

$10M was liquidated in a single day on Aave V3 this month, marking the highest amount since April.

As prices decline and liquidations occur, the selling pressure from these liquidations creates a downward spiral.
Liquidated assets belonged to users borrowing volatile… pic.twitter.com/WZq1x0Co0u

— IntoTheBlock (@intotheblock) July 12, 2024

Largest Single Liquidation Comes In At $3.8 Million

The liquidated assets primarily belonged to users who had borrowed volatile assets against stablecoins. The largest single liquidation involved $3.8 million in wstETH against USDC, highlighting the risks associated with borrowing volatile assets.

Despite the turbulence, Aave continues to demonstrate financial resilience. According to a recent report by Token Terminal, Aave has achieved its sixth consecutive profitable quarter. This sustained profitability underscores the platform’s robust financial health, even amid challenging market conditions.

@Aave had its 6th profitable quarter in a row. pic.twitter.com/ZmRcDE02xl

— Token Terminal (@tokenterminal) July 1, 2024

As the market adjusts to these liquidations, the interplay between declining prices and the resulting selling pressure continues to influence the broader crypto landscape.

Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any services.

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