Aave's Weekend Price Gap Exposes Stablecoin Suppliers to Potential Losses

Aave's V4 Equities Hub has been live since September 25, allowing users to borrow USDC against seven Coinbase stock tokens as collateral. The stablecoin suppliers who opt-in are exposed to a weekend price gap, where the feeds hold Friday's price until Sunday evening.

The Mag-7 lending spoke has a $21 million USDC draw cap and a $32 million USDC add cap. LlamaRisk, which recommended the market's initial parameters, notes that users who opt-in are aware of this exposure.

The Chainlink equity-linked feeds combine the underlying share price with a Coinbase issuer multiplier. During the weekend closure, the feeds hold their last value rather than publishing a new one. This means that interest on a USDC loan can still push a position across the liquidation threshold while the feed is frozen.

LlamaRisk's stress method uses historical off-hours stock moves and allows for a 0.5% gap between the published oracle value and the market. The configured maximum liquidation bonus of 5.5% is intended to pay a liquidator for selling, redeeming or hedging the tokens after repaying USDC debt.