{"id":578166,"date":"2026-04-03T12:52:38","date_gmt":"2026-04-03T12:52:38","guid":{"rendered":"https:\/\/e-bitco.in\/index.php\/2026\/04\/03\/aave-avoided-bad-debt-by-shifting-risk-to-borrowers-bank-of-canada-study\/"},"modified":"2026-04-03T12:52:38","modified_gmt":"2026-04-03T12:52:38","slug":"aave-avoided-bad-debt-by-shifting-risk-to-borrowers-bank-of-canada-study","status":"publish","type":"post","link":"https:\/\/e-bitco.in\/index.php\/2026\/04\/03\/aave-avoided-bad-debt-by-shifting-risk-to-borrowers-bank-of-canada-study\/","title":{"rendered":"Aave avoided bad debt by shifting risk to borrowers: Bank of Canada study"},"content":{"rendered":"

\"Aave<\/p>\n

A Bank of Canada staff paper found Aave V3 avoided bad debt in 2024, but said the model pushed losses onto borrowers during liquidations.<\/p>\n

A Bank of Canada staff paper found that Aave V3 reported zero non-performing loans in 2024, with overcollateralization and automated liquidations helping prevent lender losses in its Ethereum lending market.<\/p>\n

Using transaction-level data from Jan. 27, 2023, to May 6, 2025, the study<\/a> found that positions were typically liquidated before collateral values fell below outstanding debt, helping contain lender losses across the sample.<\/p>\n

But the model came with a tradeoff, the paper said. While it protected lenders from unrecovered losses, it also shifted risk onto borrowers and constrained capital efficiency compared with traditional lending systems.<\/p>\n

Read more<\/a><\/p>","protected":false},"excerpt":{"rendered":"

A Bank of Canada staff paper found Aave V3 avoided bad debt in 2024, but said the model pushed losses onto borrowers during liquidations. A Bank of Canada staff paper found that Aave V3 reported zero non-performing loans in 2024, with overcollateralization and automated liquidations helping prevent lender losses in its Ethereum lending market. Using […]<\/p>\n","protected":false},"author":1,"featured_media":578167,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12],"tags":[],"class_list":{"0":"post-578166","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-blockchain"},"_links":{"self":[{"href":"https:\/\/e-bitco.in\/index.php\/wp-json\/wp\/v2\/posts\/578166","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/e-bitco.in\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/e-bitco.in\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/e-bitco.in\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/e-bitco.in\/index.php\/wp-json\/wp\/v2\/comments?post=578166"}],"version-history":[{"count":0,"href":"https:\/\/e-bitco.in\/index.php\/wp-json\/wp\/v2\/posts\/578166\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/e-bitco.in\/index.php\/wp-json\/wp\/v2\/media\/578167"}],"wp:attachment":[{"href":"https:\/\/e-bitco.in\/index.php\/wp-json\/wp\/v2\/media?parent=578166"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/e-bitco.in\/index.php\/wp-json\/wp\/v2\/categories?post=578166"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/e-bitco.in\/index.php\/wp-json\/wp\/v2\/tags?post=578166"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}