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Sharpe FinanceDID YOU KNOWnext in 7s
Every major DeFi exploit this cycle has been a 3-line bug. Almost never a clever exploit.
Morpho Blue · Aave V3 · 11 chains · scoring refreshed every 5 min
Every major DeFi exploit this cycle has been a 3-line bug. Almost never a clever exploit.
LINK supply on Aave V3 (Ethereum). Read-only on Sharpe — deposits, withdrawals, and borrows execute on app.aave.com. We surface parameters, rates, and risk so you can compare this reserve against Morpho vaults on the same asset cohort.
Plain-English summary of this vault — what it does, who runs it, where the yield comes from, and what could break it. Generated from the same deterministic inputs shown elsewhere on this page; the numbers are the source, this is just the explanation.
Supplying LINK on Ethereum means depositing your tokens into Aave's pool, where they are lent out to borrowers at variable rates. You earn 0.01% APY—calculated from the 0.47% borrow rate × 3% utilization × 80% kept by Aave (20% reserve factor). LINK is borrow-only here, so it cannot be used as collateral to secure loans. Your deposited tokens remain redeemable at the reserve's available liquidity ($102.28M of $105.48M supplied).
Aave governance via Risk Council oversight; no material flags—reserve is active and standard-issue, indicating no current concerns about LINK's collateral quality or supply mechanics.
Supply APY is pinned to borrow demand. At 3% utilization, demand is minimal, so the rate is negligible. Reserve factor of 20% means Aave claims one-fifth of all borrower interest; low utilization naturally depresses the rate earned by suppliers.
Deterministic risk score is 10/100 (low severity on Aave's scale). No elevated depeg or liquidation-path signals. LINK has the oracle and liquidity backbone of a top-tier asset, mitigating tail risks.
Good fit for holding LINK if yield is not the goal; avoid if seeking supply APY—seek higher-utilization reserves instead.
On Aave V3, a supplier can withdraw up to the reserve's available liquidity instantly. Above that, the withdrawal must wait for borrowers to repay or new suppliers to deposit. Markets at 95%+ utilization can keep large redemptions waiting for hours to days at current rates.
Reserve parameters are set by Aave governance (BGD Labs + Aave Chan Initiative + Risk Council). Listings, caps, IRM curves, and LLTVs change through on-chain votes.
This reserve isn't usable as collateral, so LTV / Liquidation LLTV / liquidation bonus don't apply. Borrowers can take it against other collateral; suppliers earn the variable rate driven by borrow demand.
On Aave V3, supply APY = borrow APY × utilization × (1 − reserve factor). There is no curator skim; the only intermediation cost is the reserve factor, which funds the Aave treasury. No emissions slice in v1 of this integration — the headline is fully sustainable.
Aave V3 reserves carry parameter risk (LTV/LLTV adequacy vs collateral volatility), liquidity risk (high utilization slows exit), and depeg risk on the underlying. Governance can pause / freeze / adjust caps in response to incidents. Sharpe's full risk decomposition for Aave reserves rolls in v1.1.
How the composite risk score breaks down. Every number traces to an explicit input — /methodology documents each factor's formula.
Per-collateral decomposition: Sharpe-style realized σ from 30 daily log returns, blended 50/50 with the asset-taxonomy tier fallback. Phase 2 will replace the tier slot with liquidity depth, mechanism classification, and holder concentration. Methodology in /methodology.
The honest version. Every structural failure mode this vault is exposed to, ranked by severity. If you want to know whether to invest, start here.
Aave V3 prices and liquidations route through Chainlink's aggregator feed for this asset. A stale, manipulated, or wrong-side update is the protocol's largest single-point-of-failure for this reserve. Chainlink has a strong track record but the failure mode is binary.
Aave V3 has been live since March 2022 with significant TVL and continuous third-party audits. Historical incidents have been contained but the protocol surface is large (Pool / aTokens / debtTokens / IRM / Oracle / UiHelpers). Treat as bounded but non-zero tail risk.