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Sentora Receives 50% of Aave Revenue While Suppliers Bear All Losses

(2 days ago) · 1 source · Summarized by CryptoBipto

Sentora has reportedly entered into an arrangement where it receives 50% of Aave protocol revenue, but liquidity suppliers absorb all losses. The deal has raised questions about the distribution of risk and reward within the Aave ecosystem.

WHY IT MATTERS

In decentralized lending, regular users deposit their crypto into a shared pool so others can borrow it, earning interest in return. Think of it like putting money into a community savings fund that lends to others — you earn a cut of the interest, but if a borrower does not pay back, your deposit could lose value. This report highlights a situation where a company called Sentora is taking half the earnings from one of these lending pools (Aave), but the regular depositors are the ones who lose money if things go wrong. For newcomers to crypto, this is an example of why it is important to understand not just the potential returns of a DeFi protocol, but also who bears the risk and how revenue is shared among different participants.

Aave is one of the largest decentralized lending protocols in crypto, allowing users to supply assets to liquidity pools and earn interest while borrowers pay fees to access those funds.

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SOURCES

  • cryptoslate.com

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AAVEDeFiAave GovernanceRisk DistributionLending Protocols