How Aave's Base stock loans fared in the Nov. 5 sell-off

LlamaRisk, the firm that recommends risk parameters for Aave's tokenized-stock market on Base, reported that $393 had been liquidated on Nov. 5, the day US tech stocks fell sharply, with zero bad debt. In a post at 17:27 UTC that day, it put the supply at "~$15M in tokenized stocks supplied on Aave" and said the market's risk parameters held "up as designed." Base's Jesse Pollak quoted the post on Nov. 6 with the line "stock-backed loans on base held up during market volatility."

What LlamaRisk reported for Nov. 5

LlamaRisk listed the day's biggest movers among tokenized stocks: TSLA -10.4%, SPCX -8.5%, NVDA -7.0%, META -3.6% and MSFT -2.7%. It said only $393 had been liquidated "today" out of roughly $15M supplied, and that the market had no bad debt. The post links a LlamaRisk dashboard that tracks the Coinbase stock tokens on Aave V4's Equities Hub on Base, priced by Chainlink feeds. The figures are LlamaRisk's own and were taken mid-session; the post does not say how many positions were open or how close to their limits they were.

In its September write-up, LlamaRisk said the market starts small and that it planned "to keep the caps close to the supplied and drawn amounts and raise them as demand shows up," so the launch caps are not a yardstick for the Nov. 5 supply.

The parameters behind the result

The market is a dedicated Equities Hub on Aave V4. Tokenized equities are collateral only and USDC is the only borrowable asset, per the Aave Labs deployment proposal. LlamaRisk's recommended launch parameters in the same thread include:

• Collateral factors of 65% for TSLAc and METAc, 70% for NVDAc, 73% to 79% for the other four names. In Aave V4 the collateral factor is both the borrowing limit and the liquidation threshold, LlamaRisk wrote.
• A maximum liquidation bonus of 5.5%, with a 10% liquidation fee. A liquidation restores a position to a health factor of 1.24.
• Per-token supply caps and a 12-hour cooldown on cap changes by the risk stewards.

LlamaRisk said it sized the collateral factors so a position at the liquidation threshold would leave no bad debt after the worst overnight and weekend gaps in eight years of price history. It said the maximum bonus is meant to pay a liquidator who redeems through the issuer, sells on Base or hedges with perpetual futures.

On timing, LlamaRisk wrote that the Chainlink feeds follow 24/5 US market hours and hold the last value over weekends and holidays. Nov. 5 was a Thursday, so the feeds were publishing. Those are the launch parameters from September, and the market has since changed. LlamaRisk's October review of SPCXc, which Aave listed on Nov. 4, adds an eighth reserve to the pooled spoke. LlamaRisk recommended a 6.5% maximum liquidation bonus for it instead of 5.5%, a collateral risk premium of 1,000 bps (the launch post said risk premiums were not in use) and an add cap of 37,000 tokens, about $5.8M at the time.

In that review, dated Oct. 15, LlamaRisk also recommended a collateral factor of 0.55 for SPCXc, ten points below META and TSLA, citing a four-month trading history and higher volatility. Aave Labs re-created the listing as AIP #537 on Oct. 27; the thread does not state the final on-chain values.

In the same review, LlamaRisk named its first re-evaluation points for SPCXc: after SpaceX's Q3 earnings release, expected Nov. 3 to 5, and the roughly 1.3B-share lock-up tranche two trading days later, which it called the largest supply event still outstanding. SPCX was the second-largest mover on Nov. 5 in LlamaRisk's list, at -8.5%.

How the market got here

Aave announced on Sept. 25 that Coinbase Tokenized Stocks were live on Aave V4 on Base, noting that "tokenized stocks are only available in eligible jurisdictions outside of the U.S." Base amplified the launch the same morning. On Oct. 23, Base described the product as stock-backed loans that let eligible investors borrow USDC against tokenized stocks.

On Oct. 26, @baseposting shared a chart putting Coinbase-issued stock deposits in Aave V4 at $11.2M, led by GOOGLc at $3.8M, NVDAc at $3.0M and METAc at $1.8M. The chart credits Token Terminal. On Nov. 4, Aave said SPCXc was live on the market and users could borrow USDC against it; Descout covered that listing in its Base week piece. For the mechanics of borrowing, see our guide to borrowing against tokenized stocks on Base.

Record volume the same day

A chart posted by @baseposting on Nov. 6 marks Nov. 5 as the all-time high for tokenized-stock daily volume on Base at "$144M+". The chart covers Aug. 8 to Nov. 5 and names Blockworks as its source. Pollak reposted it. Nov. 5 was also the day Base announced its Stocks Maxxing competition, covered in our guide to its tracks and the Dec. 5 deadline. The chart reports trading volume across tokenized stocks on Base generally; it does not break out Aave.

What remains unreported

LlamaRisk's post gives no per-position data. The size of the $393 liquidation, the number of borrowers affected and each position's headroom below its collateral factor are not stated. Nor does it say whether the $15M figure was measured before or after the sell-off. One session is a single data point. LlamaRisk's September write-up singled out weekend and holiday closures as the case a 24/5 price feed has to be built around, and Nov. 5 was a weekday with the feeds publishing.