The mechanisms of the landing DeFi protocol Aave version V3 prevented the formation of hopeless debts, but this was accompanied by significant losses for borrowers. This conclusion was reached by analysts at the Bank of Canada.



According to the study, from January 27, 2023, to May 6, 2025, Aave V3 did not record a single case of loan default. This was made possible thanks to the over-collateralization model and automatic liquidations.

Typically, smart contracts close positions before the collateral value drops below the debt amount. This helps protect lenders from losses.
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NewNamevip
· 16h ago
Thank you for information!
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