Some Aave loans sit near liquidation with collateral that can take hours to cash out
LlamaRisk’s Oct. 9 reviews found concentrated Aave exposures backed by yield-bearing collateral with little room before liquidation. Monad’s largest PT-AUSD suppliers had health factors of 1.01–1.18, and the PT supply cap was fully used. Before its December 2026 maturity, seized PT must be sold through Pendle markets and converted into the stablecoin owed, so market depth and price impact affect recovery. On Arc, two borrowers held about 97% of supplied syrupUSDC, with health factors of 1.01 and 1.02. Local sale liquidity was limited; the alternative is bridging to Ethereum and redeeming through Maple’s queue, which can take up to 30 days. LlamaRisk recommended increasing supply and borrowing caps in both markets. Larger caps could expand exposure, while liquidation outcomes depend on recoverable proceeds, conversion costs, available liquidity and financing during redemption delays.
