$AAVE is a decentralized lending protocol based on Ethereum. Users deposit over-collateralized assets (such as ETH, DAI) into a liquidity pool to earn interest (in the form of aToken), and borrowing requires collateral.

Flash loans allow for uncollateralized loans but must be repaid within a single block. The protocol is governed by AAVE token holders through DAO governance, determining parameters such as interest rates and asset listings. If the value of collateral falls below a certain threshold, triggering liquidation, the system automatically sells the collateral to repay the debt; in extreme cases, AAVE tokens in the safety module may be auctioned off to maintain liquidity.

Notes:

​Market volatility: AAVE's price is significantly affected by the overall cryptocurrency market and DeFi industry policies, with a potential short-term drop of 30%;

​Smart contract risk: Although audited, code vulnerabilities may still lead to liquidation or asset loss;

​Regulatory policy changes: The global regulatory framework is undetermined, and adjustments in U.S. policy may impact protocol operations;

Collateral management: If the value of over-collateralized assets plummets (e.g., ETH falls below 75% collateral ratio), liquidation will be triggered;

​Transaction security: Choose compliant exchanges, be aware of phishing attacks, and avoid leaking private keys;

Complexity of token mechanism: It is necessary to understand core functions such as interest rate switches, flash loan rules, and governance voting rights;

Competitive pressure: Emerging lending protocols may siphon market share, requiring attention to technological iterations.

This market should be shorted, always short and always profitable!!!

Still the same saying, bulls have their strategies, bears have their play styles.

Will not lead fans to liquidation, nor blindly open positions.

All are about steady wins, steadily advancing; those who want to profit, keep up!

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