aave has decided to unfreeze the Ethereum Core WETH market i find this decision a quite ill considered. in the current conditions/IRM configuration, this basically allows LST/LRT holders to take out extremely profitable looping positions, ensuring that aEthWETH remains illiquid for users trying to withdraw taking a look at a weETH loop as an example (weETH is not borrowable so has no solvency risk to Aave market): - weETH trades at 0.5% discount. if we assume this reverts to par-value within 1 month, this means the implied yield is ~6% plus base staking yield (lets call it 8% total) - the Aave Core ETH borrow rate is hard-capped at 5.15%. so each loop earns additional 2.85% yield. weETH can use 14x leverage so the final return would be up to ~45% (and this position cant be squeezed bc utilization is already at 100%) - this strategy also has short-side optionality into Aave solvency fears (eg if aEthWETH trades down to 1% discount, looper can earn instant ~13% return by purchasing aWETH and repaying debt with aToken) basically, this is just a free-money trade for LST/LRT loopers, while making UX for aWETH holders and stablecoin borrowers who have been stuck for the past 3 days even worse maybe this is the explicitly the goal and Aave team want to trap aWETH users in the market, preventing them from withdrawing collateral or refinancing high-cost debt positions to other lending markets? regardless, this decision seems to be based on PR considerations (wanting to show un-frozen ETH market on the frontend) rather than sound risk management or user protection