@murphycrichton
Aave’s risk management framework is designed to ensure platform stability by implementing mechanisms like collateralization ratios, liquidation thresholds, and interest rate models. These mechanisms ensure that the platform remains solvent and that lenders’ funds are secure. For example, if the value of a borrower’s collateral falls below a certain threshold, the collateral is automatically liquidated to cover the loan, reducing the risk of default. This framework ensures that Aave operates securely and efficiently, even in volatile markets.
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