Aave Stock-Token Loans Expose Lenders to Weekend Price Gap Risk
Aave's stock-token loans have exposed lenders to a weekend price gap. Since September 25, seven Coinbase stock tokens have been accepted as collateral for USDC loans on Aave's Base market. This allows stablecoin suppliers who opt-in to be exposed to the pricing gap between Friday evening and Sunday evening.
The Aave V4 Equities Hub was temporarily halted before being lifted on September 25. The Mag-7 lending spoke has a $21 million USDC draw cap, which is not related to loans already made. During this time, the stock tokens can still change hands onchain, but their prices will be held at Friday's value.
According to LlamaRisk, who recommended the market's initial parameters, the exposure is only for those who opt-in and does not flow into Aave's other markets. The Chainlink equity-linked feeds combine the underlying share price with a Coinbase issuer multiplier. They hold their last value from Friday evening to Sunday evening.
Liquidators may have to carry seized exposure until deeper stock-market hours on Monday, as interest on USDC loans can still push a position across the liquidation threshold while the feed is frozen.