At the same time, the platform’s withdrawal queue has surged to its highest level since withdrawal functionality was enabled, with more than 235,000 stETH awaiting exit.
According to its website, the platform still offers a 2.8% annual percentage rate (APR) and reports more than $33 billion in total value locked.
The downturn in Lido’s market position coincides with a prolonged depegging of stETH from ETH.
Mark Zeller, co-founder of Aavechan, pointed to repeated large ETH movements, particularly from whales like Justin Sun, as a factor driving up Aave’s utilization rates.
According to him, these withdrawals spiked Aave’s utilization rate, making borrowing prohibitively expensive and accelerating the unraveling of leveraged positions.
Although the peg briefly broke sharply, Zeller noted that borrowing rates have since normalized and expects stability to return.
