Try Quests to earn cryptoAave Liquidations On Ethereum Mainnet
A live dashboard with deep insights into liquidations on Ethereum mainnet Aave.
Method & Definitions
For a liquidation transaction to be possible, a borrower must have some debt collateral that falls below the collateral ratio and a willing liquidator to take on the debt. Thus for a successful liquidation transaction, there must be:
- Borrower - A wallet with a debt collateral
- Liquidator - A user to debt collateral at a certain discount.
- Collateral asset - The asset which is posted as collateral and borrowed against.
We shall analyze all the building blocks that make up a liquidation transaction and give insights and trends.
The total sum of funds to be liquidated on Aave is about $1.4b in value from 6.8k borrowers. So far 733 wallets are taking part in the liquidation process. The amount of liquidation is directly proportional to the frequency of liquidations.
On average, bout 36.9 thousand USD worth of crypto tokens have been liquidated on Aave on mainnet every week since its launch. Liquidations were more rampant in 2021 than in any other year.
About 27 borrowers are liquidated every week by about 4 liquidators. Borrowers experienced more liquidations in May/June 2022 which coincided with the beginning of the down market in 2022.
For mere transaction count there are on average about 200 weekly Aave liquidation transactions on Ethereum mainnet. The number peaked as high as 400 to 600 in weeks in May/June 2022 when prices of crypto tokens were extremely volatile.
Aave
Aave is a decentralized exchange protocol that operates like a bank. Users are able to deposit collateral (tokens) and also borrow other coins against the provided collateral. When the price of the collateral increases, everyone is happy and borrowers are able to borrow more, but when the price of collateral, the collateral of borrowers is sold at a discount to avoid the debt going bad in case the borrower is not able to pay off the debt. This process is what is known as liquidation.
The minimum amount of collateral liquidated was about zero (0) while the highest amount ever liquidated in a single transaction was 9.1 million USD. In Wrapped Ether (WETH) has been the most liquidated collateral asset followed by WBTC, and USDC. 0xa25a9b7c has suffered the most liquidations with a total liquidated amount of ~79 million USD.
About 42% of all lenders have borrowed against their collateral assets at the time of writing. Of which 11.91% have been liquidated at least once. About ~88% of all borrowers have never been liquidated. Mev bots are the main actors involved in liquidations.