Half of Aave’s debt sits in just 9% of positions built around one Ethereum correlation trade
Galaxy's Aug. 7 snapshot of Aave V3 Core found 19,073 loans on the protocol after applying standard filters. Fewer than 9% of those positions are using Aave's E-mode setting, account for roughly half of all outstanding debt on the platform, and show an Ethereum correlation trade.
Galaxy puts their debt-weighted loan-to-value near 90%, their average health factor around 1.06, and their debt-to-equity ratio near 10.7 times. The remaining 91% of positions carry a debt-weighted LTV closer to 49%, a health factor around 1.79, and debt-to-equity near 1.07 times, a profile with far more room to absorb a bad day.
| Borrower group | Share of positions | Share of debt | Debt-weighted LTV | Avg. health factor | Debt-to-equity |
|---|---|---|---|---|---|
| E-mode borrowers | 8.91% | ~50% | ~90% | ~1.06 | ~10.7x |
| Other analyzed borrowers | ~91% | ~50% | ~49% | ~1.79 | ~1.07x |
The concentrated cohort is holding Ethereum
Galaxy found that Ethereum staking and restaking wrappers, including weETH, rsETH, and wstETH, make up about 66.2% of the collateral backing these loans, with weETH alone accounting for roughly 42%. On the other side of the ledger, WETH makes up about 73% of the group's debt.
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