Understanding Risk on Aave

Hey! Could someone please clarify who takes what risk on Aave? As an example, if there’s a liquidity crunch / lots of borrowers default, is the Aave protocol bearing the risk or is it the lenders?
Yes, Aave has mechanisms in place to mitigate the risk (reserve factor, LTV etc.) but I’m curious as to who ultimately bears the risk.

Thanks!

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Hey man, in case of a black swan event, the safety module is there to limit the damage

I invite you to read more here: Safety Module - Aavenomics & Migration and Staking - FAQ

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