This past week, Aave V3 on the Ethereum mainnet experienced its highest daily liquidations since early February, coinciding with significant market volatility.
According to Galaxy Research, approximately $98.6 million in collateral was liquidated between April 6 and 7, following a similar trend earlier in the year when around $211.2 million was liquidated during the initial tariff threats by President Trump. In the recent liquidations, ethereum (ETH) accounted for $66.9 million, or 68% of the total, while wrapped bitcoin (wBTC) made up $9.8 million, or 9.8%. Despite ETH leading in liquidations, it represents only 21% of the actively borrowed collateral on Aave V3. Galaxy Research attributes ETH’s significant impact to two main factors: its relative underperformance in the broader market and the aggressive leveraging by borrowers, which increases downside risk during liquidation events.
