Less than 9% of Aave positions hold about half of outstanding debt via an Ethereum correlation trade
AI Market Summary
Galaxy's snapshot shows Aave V3 debt is highly concentrated: <9% of positions (Emode) hold ~50% of debt with ~90% debt-weighted LTV and ~1.06 average health factor, largely tied to ETH staking wrapper basis trades (weETH/rsETH/wstETH collateral vs WETH debt). The key risk is wrapper/ETH discounts; an 8–9% basis move could push cohort-average health factors toward liquidation, raising tail-risk for ETH-linked DeFi leverage.
Impact level
● Medium
Affected assets
ETH/USDT+0.03%
AI Insight · ETH/USDTAI Insight
▼ Bearish
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Fewer than 9% of positions on Aave account for nearly half of the protocol’s outstanding debt, concentrated in an Ethereum correlation trade. Galaxy data show this group has a debt-weighted loan-to-value ratio near 90%, an average health factor around 1.06, and a debt-to-equity ratio near 10.7x. The other 91% of positions have a debt-weighted LTV around 49%, an average health factor around 1.79, and debt-to-equity near 1.07x, indicating greater capacity to absorb stress. On the liability side, WETH represents about 73% of this cohort’s debt, and the analysis notes that if collateral and debt fall together, the health factor changes little.
