Decentralized Lending Protocol Aave has successfully processed $ 210 million in liquidations without adding to the existing bad debt.
Data of Chaos Labs Show that after the flash crash on Monday, who threw around $ 2.2 billion in the crypto market value, the extreme market volatility led to a sudden peak in liquidations in the protocol. The liquidations summarize up to $ 210 million, the largest such single-day liquidation total since the crash of 5 August.
Usually periods of high volatility create the conditions for bad debts, because the perfect storm of multiple liquidation requests, steep price drops and low demand create long -term liquidation queues that can struggle a protocol to clean up.
Confronted with this situation on Monday, Aave succeeded in scaling by what came on a stress test without adding a new debts, and even reducing the total of existing poor debts by 2.7 percent as a result of a reduction in the Value of the bath debt activa.
Chaos Labs analyzed the successful liquidation and said in a post on X:
Liquidations were efficiently carried out on the protocol, most of which were performed on the main body of Ethereum. The robust risk management mechanisms within AAVE ensured that the collateral positions were arranged as intended, so that protocol losses were minimized.
A breakdown of the liquidations shows that WETH was good for $ 96 million, while WBTC was good for $ 25 million. $ 20 million in Wine was also liquidated, as $ 11 million in Wsteth. A basket with smaller assets, including Reth and CBBTC, formed the remaining registered liquidations.
The market reaction to Aave’s performance was full of praise, where analysts, including Bitwise Cio Matt Hougan, praised the protocol to keep an eye on it.
On January 7, Aave confirmed his commitment to the aptos test network, the very first non-EVM implementation, as part of his ambitious plan to extend the effort to 6 new chains, including APTOS, Botanix Labs’ Spider Chain, Linea, Mantle and Sonic.
