Ethereum Lending Tops $28B as Aave Handles Weekend Liquidations

In a report from Beincrypto, Ethereum on-chain lending surpassed $28 billion, led by Aave which controls roughly 70% of the network’s active lending market. Data showed active loans achieved a tenfold increase from January 2023 lows, highlighting Ethereum’s continued dominance in DeFi.

The late January 2026 weekend crash tested the system: Bitcoin dropped sharply from around $84,000 to below $76,000 amid thin weekend liquidity, geopolitical tensions in the Middle East, and pressure from US government funding uncertainties. Over $2.2 billion in leveraged positions were liquidated across centralized and decentralized exchanges in 24 hours.

Aave processed over $140 million in automated collateral liquidations across multiple networks on January 31, 2026 without downtime or bad debt, despite Ethereum gas fees spiking above 400 gwei that temporarily created “zombie positions.” Other protocols, including Compound, Morpho, and Spark, absorbed smaller liquidation volumes but lacked the scale or automation to fully replace Aave.

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