Aave founder: Aave protocol liquidated over $450 million in collateral in the past week

Aave founder Stani posted on the X platform, stating that the Aave protocol and the entire DeFi ecosystem have experienced a remarkably resilient week. Over the past seven days, the protocol has liquidated collateral worth more than $450 million across multiple networks. For a lending protocol with a scale exceeding $50 billion, this accounts for about 0.9% of the total deposits at that time. Meanwhile, Aave continues to accumulate additional revenue.

There may be bad debts during the lending process, and Aave has built-in mechanisms to handle such situations. Its resilience is attributed to a broad, autonomous liquidation network. Additionally, a new liquidation engine will be launched for Aave V4, bringing greater flexibility and performance to the protocol.

Stani believes that DeFi wins through resilience, transparency, and superior cost structures, and these systems should be applied to all assets in both the crypto space and traditional finance.