Let us explore the top 10 addresses with at least $1mm at stake during this time period on Aave by lowest average collateralization ratio (collateral over debt - so the higher the ratio, the less risky the loan is) on all of their positions (that didn't end up being liquidated) over the past 6 months.

Aave is a decentralized finance protocol that allows people to lend and borrow crypto, where in Lenders earn interest by depositing digital assets into specially created liquidity pools. Borrowers can then use their crypto as collateral to take out a flash loan using this liquidity.

AAVE is the Ethereum token that powers Aave protocol, a decentralized non-custodial money market protocol where users can participate as depositors or borrowers.

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The Aave Protocol is a decentralised liquidity protocol, which allows users to unlock liquidity across various assets in a multi-pool approach. The new AMM Liquidity Pool enables liquidity providers (“LPs”) of Uniswap and Balancer to use their LP tokens as collateral in the Aave Protocol.

Here is the visual that shows the Top 10 Liquidator addresses by the total amount liquidated over the past one year on Aave network.

https://analytics.zoho.in/open-view/210340000000083424

https://analytics.zoho.in/open-view/210340000000083424

By providing liquidity, users automatically obtain LP tokens from the AMM. In most cases, LP tokens represent the crypto assets the user deposited into the AMM along with a proportional scale of the trading fees collected over time in the particular liquidity pool into which the user deposited assets. Because LP tokens typically accrue trading fees over the time the user’s assets remain in the liquidity pool, the LP tokens potentially accrue value over time as well.

The below graph shows the Collateral over Debt amount by Token symbol on Aave network.

https://analytics.zoho.in/open-view/210340000000082405

https://analytics.zoho.in/open-view/210340000000082405

Aave generally provides liquidity in the form of short term loans, stable return on capital, and relatively low risk. Users deposit digital assets into "liquidity pools," which become funds that the protocol can lend out.

Here is the visual that provides the total liquidated amount by Aave version over the past one year on Aave protocol.

https://analytics.zoho.in/open-view/210340000000083666

https://analytics.zoho.in/open-view/210340000000083666

Each asset on Aave has a ****liquidation threshold: the point at which the value of your borrowed assets overpowers the value of your collateral. At this point, the loan is now considered under-collateralized and you will get liquidated. The liquidation threshold in Aave for ETH as collateral is 82.5%. This means that if the value of your borrowed assets gets to be 82.5% of the total value of your collateralized ETH, that collateral gets liquidated. To be liquidated means your assets are sold off.

References:

https://medium.com/aave/aave-amm-market-released-73ae76a7cbc0