How Does Aries Markets Work?

Lending|Risk B-|6 mechanisms|5 interactions

A lending protocol on Aptos where you deposit crypto to earn interest or borrow against your holdings. It holds $12M in deposits with standard lending mechanisms. Its B- grade reflects clean operation and standard design, offset by aggressive 90% LTV in e-mode and an oracle vulnerability flagged by security auditors.

TVL

$10M

Sector

Lending

Risk Grade

B-

Value Grade

C+

Core Mechanisms

Lending/Pool-Based

Overcollateralized lending pools on Aptos

Standard Aave-style lending pool pattern on Aptos.

Lending/E-Mode

E-Mode for correlated Aptos assets with 90% LTV

Standard e-mode pattern (Aave V3 since 2022).

Lending/Isolation-Mode

Isolated markets for higher-risk Aptos assets

Standard isolation mode pattern.

Liquidation/Automated

Automated liquidation with configurable parameters

Standard liquidation engine.

Oracle/External

External oracle feeds for Aptos asset pricing

Oracle integration for Aptos assets. OtterSec audit flagged pricing vulnerability.

Governance/Team-Controlled

Team-controlled protocol parameters

No governance token. Team manages all parameters.

How the Pieces Interact

E-Mode 90% LTV↔Aptos asset correlationHigh

90% LTV on correlated Aptos assets leaves 10% margin. A 10%+ APT price drop could trigger mass liquidations across all e-mode positions simultaneously.

Oracle pricing↔Low-liquidity Aptos assetsHigh

OtterSec flagged critical oracle vulnerability. Low-liquidity Aptos assets are susceptible to price manipulation that could trigger incorrect liquidations or enable undercollateralized borrowing.

APT-concentrated deposits↔Market correlationMedium

Most deposits are in Aptos-native assets. An APT downturn triggers correlated liquidations across all markets simultaneously.

Liquidation engine↔Aptos DEX liquidityMedium

Liquidation proceeds depend on Aptos DEX liquidity. In stress scenarios, thin DEX liquidity could prevent efficient liquidation, creating bad debt.

Team control↔Protocol parametersLow

Without governance, the team can unilaterally change LTV ratios, oracle feeds, or liquidation parameters affecting all depositors.

What Could Go Wrong

  1. E-Mode allows up to 90% LTV, leaving extremely thin liquidation margins that can be breached in rapid price declines of correlated Aptos assets.
  2. OtterSec audit flagged critical oracle pricing vulnerability; oracle manipulation on low-liquidity Aptos assets remains a systemic risk.
  3. Concentration of deposits in Aptos-native assets creates correlated liquidation risk during APT downturns.

E-Mode Liquidation Cascade on Aptos

Moderate

Trigger: APT price drops 15%+ in 4 hours while e-mode positions at 90% LTV exceed $50M across correlated Aptos assets

  1. 1.APT price crash pushes e-mode positions with 90% LTV below liquidation threshold — Mass liquidations trigger across all e-mode positions simultaneously
  2. 2.Liquidation bots compete for limited Aptos DEX liquidity to sell seized collateral — Thin DEX liquidity causes high slippage; liquidation proceeds fail to cover debts
  3. 3.Protocol accrues bad debt from insufficiently liquidated positions — Lenders face losses as bad debt is socialized across remaining deposits
See all 2 collapse scenarios in the full risk report →

Risk Profile at a Glance

Mechanism Novelty0/15
Interaction Severity10/20
Oracle Surface5/10
Documentation Gaps2/10
Track Record3/15
Scale Exposure3/10
Regulatory Risk3/10
Vitality Risk8/10
B-

Overall: B- (34/100)

Lower score = safer

More on Aries Markets

Is Aries Markets Safe?

Safety analysis

Is Aries Markets a Good Investment?

Value analysis

Full Risk Report

All mechanisms & interactions

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