Some Aave borrowers are sitting very close to liquidation with collateral that cannot be sold instantly.
CryptoSlate's review of October 9 snapshots found thin buffers in selected PT-AUSD and syrupUSDC positions. The catch: liquidators need cash up front, but this kind of yield collateral can take hours to turn back into stablecoins.
My view: that delay is the hidden risk in looped yield strategies on $AAVE . The interest looks steady until a fast move forces liquidators to price in the wait, and the discount lands on the borrower.
💬 Do you check how quickly your collateral can be sold before you borrow against it?
#Aave #DeFi
CryptoSlate's review of October 9 snapshots found thin buffers in selected PT-AUSD and syrupUSDC positions. The catch: liquidators need cash up front, but this kind of yield collateral can take hours to turn back into stablecoins.
My view: that delay is the hidden risk in looped yield strategies on $AAVE . The interest looks steady until a fast move forces liquidators to price in the wait, and the discount lands on the borrower.
💬 Do you check how quickly your collateral can be sold before you borrow against it?
#Aave #DeFi