According to The Block, the total settlement amount of the Ethereum on chain lending market in August exceeded $436 million, of which $289 million came from Aave, accounting for approximately 66% of the total settlement amount. This is the second highest monthly clearing record in the on chain lending market in history, second only to May 2021 when the clearing amount was approximately $671 million.

The high total amount of on chain lending and clearing is closely related to the price of Ethereum. According to price data, the price of ETH fell by 22% month on month in August, and even dropped by 35% at its lowest point.

Due to ETH being widely used as collateral on DeFi lending platforms, especially Aave, the price drop has led to a decrease in the collateral value of many loans, resulting in a loan to value ratio below the required threshold, which has triggered a wave of liquidation. In addition, the chain effect of liquidation further exacerbated the situation, leading to high liquidation costs.