EXPOSURE TO AAVE'S POTENTIAL RISK AT AN 18% SINGLE-DAY INCREASE IN THE TAIFAH

ON 20 AUGUST, THE SINGLE-DAY INCREASE IN THE ETA REACHED ABOUT 18 PER CENT, THE VOLUME OF TRANSACTIONS SURGED BY 402 PER CENT, THE EMPTY POSITION OF OVER $1 BILLION WAS LIQUIDATED AND THE OVERALL MARKET VALUE EXCEEDED $1 TRILLION. HOWEVER, THE STRUCTURAL VULNERABILITY OF THE AAVE AGREEMENT REMAINS UNRESOLVED BEHIND THIS INCREASE. THE DATA SHOW THAT 9 PER CENT OF AAVE ' S POSITIONS BEAR ABOUT HALF OF THE TOTAL DEBT, AND THE AVERAGE HEALTH FACTOR IS ONLY 1.06, WHICH MEANS THAT WHEN THE MARKET IS EXPOSED TO NEGATIVE FLUCTUATIONS OF 8 TO 9 PER CENT, LIQUIDATION MAY BE TRIGGERED. WHILE THIS INCREASE DOES NOT TEST THIS VULNERABILITY, IT MAY ALSO LEAD TO INCREASED LEVERAGE BY TRADERS AND FURTHER RISK. AAVE CURRENTLY HAD A TOTAL LOCK HELD VALUE OF APPROXIMATELY $12.2 BILLION, A STABLE CURRENCY SUPPLY OF $8.98 BILLION, AND BORROWING OF $7.4 BILLION, A UTILIZATION RATE OF 82.46 PER CENT。