Spark Strategy Lead Questions Aave’s Decision to Unfreeze the WETH Market, Potentially Exacerbating Risks for Ordinary Users
Source：
x.com
MonetSupply, Strategy Lead at Spark, tweeted that Aave has decided to unfreeze the Ethereum Core WETH market. However, he believes that under current conditions and with the existing interest rate model configuration, this move could enable LST/LRT holders to establish high-yield recursive leveraged positions, leaving the aEthWETH pair perpetually illiquid for withdrawal users. Using weETH as an example, he noted that if weETH’s current ~0.5% discount reverts to parity within one month, the implied yield would be approximately 6%, rising to roughly 8% when combined with base staking yields. Meanwhile, Aave’s Core ETH borrowing rate cap stands at 5.15%, enabling an additional ~2.85% yield per recursion cycle and a maximum potential return of ~45%. He further warned that this strategy could further degrade the user experience for aWETH holders and stablecoin borrowers.
