Delphi Digital: Aave's three core markets have structural issues, resulting in an annual loss of approximately 52 million dollars

Delphi Digital pointed out in its latest post that WETH, USDT, and USDC are the three largest lending markets on Aave's Ethereum market, accounting for 89% of the total borrowing volume. The supply rates for these three markets are about 25%-35% lower than the borrowing rates, resulting in an annual loss of approximately $52 million, nearly half of Aave's annualized revenue for the first quarter. Even if the reserve factor is completely eliminated, there would still be a loss of about $36 million.

Delphi believes that Aave's peer-to-pool model has significant structural flaws. The KelpDAO bridge attack on April 18 further exposed this issue. The attacker leveraged $292 million in rsETH on Aave, leading to nearly $200 million in bad debt for Aave, and the main markets like WETH experienced 100% utilization, freezing for up to 5 days.