According to on-chain analyst EmberCN, the wallet removed $570 million USDT from Aave’s lending pool within three hours, slashing the available borrowable USDT liquidity to $91.95 million.
The analyst pointed out that USDT interest rates on Aave spiked sharply, with deposit rates jumping from 3.8% to 29%, and borrowing rates climbing from 4.4% to 33.6%.
EmberCN added that these elevated rates often attract yield-seeking depositors and encourage borrowers to repay, potentially stabilizing the liquidity imbalance.
According to the firm, this has resulted in high utilization, effectively trapping other large depositors who can not exit without incurring slippage or unfavorable rates.
He expressed confidence that the issue would resolve quickly as new capital flows into capitalize on the elevated yields. He stated:
“It’s just Justin Sun apeing around. Not the first time. We have large LP that will deposit situation back to normal in a few hours.”
The move has weighed on AAVE’s price, which dropped over 4% to $261.32 at the time of reporting, according to data from CryptoSlate. The dip marks a shift after the token posted a 60% gain over the past month.
