# Aave Yield: depositing more value as collateral than they borrow. **Aave Loans are over collaterlatorilised** When you lend stablecoins on Aave, you do not need to worry about borrower defaults in the same way you would with a traditional bank. This is because loans on Aave are over collateralised and automatically secured. **Borrowers on Aave must deposit more value as collateral than they borrow. For example, to borrow one hundred dollars of USDC, a user might need to lock up one hundred fifty to two hundred dollars worth of ETH.** This extra collateral protects lenders. If the collateral value drops too much, the loan is automatically liquidated to repay the debt. If a borrower's loan-to-value ratio rises above a safe limit, Aave’s smart contracts automatically sell the collateral. This ensures the lender is repaid before the position becomes under collateralised. Liquidations happen automatically and transparently on chain, so there is no manual enforcement or default risk. When you lend on Aave, you are not lending directly to one borrower. Instead, you deposit into a shared liquidity pool. Borrowers draw from this pool, and everyone in it shares the interest generated. Aave has billions of dollars in total liquidity. New lenders are constantly adding funds, while borrowers pay interest to use them. Even if demand surges, variable interest rates rise to attract more liquidity, keeping the pool balanced and solvent. You also do not need to trust any individual borrower. The protocol enforces all borrowing and repayment through code. All transactions, collateral, and liquidations are transparent and auditable on-chain. In short, Aave lets you lend stablecoins and always get your capital back. You do not have to worry about borrower risk. The collateral deposited by a borrower is always more larger than the loan value. Liquidations protect the pool from losses. This is why Aave is a popular choice for earning yield on stablecoins with no traditional credit default risk, making the Stablecoin For Impact Platform a safe and sustainable way to finance social impact. --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://launchnodes.gitbook.io/stablecoin-for-impact-sfi/donating-stablecoin-yield/aave-yield-depositing-more-value-as-collateral-than-they-borrow..md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.