According to Wu Blockchain, a report titled *'DeFi Lending: Returns, Leverage, and Liquidation Risks'* published by the Bank of Canada analyzes transaction-level data from Aave V3 and concludes that DeFi lending with proper governance is operationally feasible. The report finds that the protocol's returns are concentrated in a few tokens; despite over-collateralization requirements, many users still engage in recursive leverage. Additionally, liquidations typically occur in concentrated volatility events but have limited impact on the broader market. However, the report also highlights that DeFi lending still faces limitations related to capital efficiency, liquidation risks, and systemic vulnerabilities within the crypto ecosystem. https://(wublock123.com)/news/canada-central-bank-deems-defi-lending-governance-feasible-59083